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Production 

and 

Marketing 

Practices 

for 



M£UO#/A/£ 



A Study of the Marketing 
of Frozen Desserts 

Marketing Research Report No. 212 



U.S. DEPARTMENT OF AGRICULTURE 
Agricultural Marketing Service 
Marketing Research Division 



Production 

and 

Marketing 

Practices 

for 



MEUOWA/f 



A Study of the Marketing 
of Frozen Desserts 

Marketing Research Report No. 212 



U.S. DEPARTMENT OF AGRICULTURE 
Agricultural Marketing Service 
Marketing Research Division 



PREFACE 

This report covers one phase of an economic analysis of the marketing of 
frozen desserts which contain fats other than milk fat. The Dairy Research 
Advisory Committee recommended such a study, to cover the "marketing prac- 
tices , marketing organization, production and distribution costs, and legis- 
lation." The results give some understanding of competitive relationships 
among the various frozen desserts being sold in States in which the mellorine- 
type product is legal. Further studies are under way. 

The work was done by the staff of the University of Kansas Bureau of 
Business Research under contract with the U. S. Department of Agriculture. 
Paul E. Malone, director, and Horace W. Harding, assistant director, of the 
Bureau of Business Research, supervised the research on which the report is 
based. Louis F. Herrmann, Head, Dairy Section, Marketing Research Division, 
Agricultural Marketing Service, represented the Department in negotiating and 
supervising the contract. 

The study is one of many conducted by the Agricultural Marketing Service 
to provide better understanding of the marketing of farm products, as a basis 
for improved marketing in all phases of agriculture. 



February 1958 



For sale by the Superintendent of Documents, U. S. Government Printing Office 
Washington 25, D. C. - Price 45 cents 



CONTENTS 

Page 

Summary ii 

Introduction . . . ■> 1 

The broad pattern of development 1 

The legal basis of the industry h 

American Meat Institute model bill k 

Significance of the bill to the industry 5 

State variations from the model bill 6 

Survey of the industry 16 

Initial manufacture l6 

When plants began producing « 17 

Discontinuances 22 

Production volume „ 23 

Frozen products „ „ 23 

Mix production for others 29 

Manufacturing 31 

Ingredients 32 

Manufacturing problems and cost 38 

Marketing , „ kh 

Sales k6 

Market outlets ...» ^8 

Container sizes ^k 

Promotion and advertising 58 

Gross margins 66 

Implications „ » 70 

Conclusions 72 



iii 



SUMMARY 

Frozen desserts made with fats other than milk fat are commonly known as 
mellorine. They have been made and sold in 12 States beginning at various 
dates during the past decade. Mellorine production in 1956 totaled 33 million 
pounds, compared to 651 million for ice cream. Production of mellorine in 
recent years has been increasing at a slower rate than in the beginning. This 
suggests that further large percentage increases in mellorine sales are un- 
likely in the markets where it is now sold. 

The incentive to begin making mellorine, as reported by manufacturers re- 
sponding to a survey questionnaire, was most commonly to meet competition. 
Many also added this product to their line of frozen desserts in order to in- 
crease their volume of business. Small plants often were the first in their 
areas to begin making mellorine. Larger plants apparently delayed entry into 
production until there was evidence that the product could be made success- 
fully and that there was an effective demand. 

The low price at which mellorine can be sold in comparison with ice cream, 
is an important factor in its growth. Not only is mellorine lower in price 
because less costly fats are used, but gross margins of many manufacturers and 
retailers are lower than on ice cream. The price structure appears to be in- 
fluenced as strongly by competitive factors as by costs. A reflection of this 
is seen in the emphasis on price as the leading feature in advertising of the 
product. Also, the marketing outlets most emphasized are chainstores and in- 
dependent supermarkets; here price competition is frequently intense, and the 
large volume of sales makes for lower marketing costs . 

Mellorine production processes are nearly identical with those for ice 
cream. The most important production problems reported by manufacturers were 
those of overrun and shrinkage, which are common in the production of frozen 
desserts generally. A few problems peculiar to mellorine -type desserts were 
reported; problems of flavoring, emulsifying, and adhesion of fat to equipment. 
Small plants most frequently reported such difficulties. 



PRODUCTION AND MARKETING PRACTICES 
FOR MELLORINE 



A Study of the Marketing of Frozen Desserts 



INTRODUCTION 

Competition among food fats took a new turn in the United States in the 
late 19^+0' s when a frozen dessert made with vegetable fats became established 
in Texas. The product was legally defined as "mellorine" in that State in 
1951. To date, mellorine is legal in 12 States: Alabama, Arkansas, California. 
Illinois, Louisiana, Missouri, Montana, Nevada, Oklahoma, Oregon, South 
Carolina, and Texas. Laws regulating frozen desserts preclude its manufacture 
and sale in the remaining States. Between 1952 and 1955* the output of mel- 
lorine in these States grew from 11 million gallons to 33 million. 

Nearly all the production of mellorine -type frozen desserts is carried on 
in plants which also manufacture ice cream. The equipment is identical, and 
only minor variations in the process are necessary when other fats are used in 
place of milk fat. The rapid growth of mellorine production was in large part 
a result of the lower selling prices made possible by the use of cheaper fats. 
The cost difference in fats would permit mellorine to sell at prices about 15 
to 20 percent below ice cream prices. But frequently the amount by which 
mellorine undersold ice cream was greater than the difference In the cost of 
materials. Apparently other factors in production, distribution, promotion, 
or pricing policy contributed to the competitive status of the product. 

This report describes some of the features of the marketing of mellorine 
which may be associated with its development. 



The Broad Pattern of Development 

It seems likely that the first step toward the introduction of mellorine 
was a mixing of vegetable oils and butterfat. Scattered producers of ice 
cream, borrowing ideas from the past and from abroad, attempted to reduce 
prices by using a cheaper raw material, so as to increase the volume of their 
sales and maintain or expand total profits. This mixing was facilitated by 
the fact that ice cream machinery can also make frozen desserts using vege- 
table oils or animal fats . 

The second phase of development for the industry as a whole began with 
the production of mellorine as such in 19^-2. This period was characterized 
by growth in the number of manufacturers in several States, subject only to 
the general Federal and State laws pertaining to food products. 



A third phase began in 1951, when the Texas State Board of Health, oper- 
ating under its general authority, promulgated regulations for the production 
and distribution of mellorine l/. These regulations gave the product a 
specific definition for the first time. The pertinent parts of that defini- 
tion are : 

"Mellorine is a frozen or unfrozen product made from edible 
fat, milk solids, and sugar, with or without a natural flavoring, 
and contains not less than 6 percent edible fat, and not less than 
30 percent of all solids including fats, and may contain not more 
than 1 percent of a stabilizer approved by State Health Officer; 
and may contain one or more of the following optional ingredients : 
Eggs, fruit, salt, nuts, extracts, harmless coloring, chocolate or 
cocoa, and sucrose, dextrose, fructose, and any other sweetener 
approved by State Health Officer. 

"Use of the word 'cream,' or its phonetic equivalent, however 
spelled, in connection with the labeling, advertising, branding, 
or sale of this product is prohibited by Article 708, Penal Code 
of Texas. 

"The manufacture of Mellorine shall meet the same rules and 
regulations that govern the production and manufacturing of ice 
cream and other manufactured milk products (as promulgated by the 
State Health Department, January 1, 1946)." 

This third phase of development was extended in 1953 when Alabama, 
Arkansas, Illinois, Montana, and Oregon enacted legislation on the manufacture 
and sale of vegetable-fat frozen desserts. Authorized sale of the product in 
California also started in 1953, although laws pertaining to "imitation ice 
cream" had existed in the State statutes as early as 1929- These laws had 
been so restrictive that not until 1953, when the California courts removed 
the narrow interpretation previously placed upon them, were licenses to sell 
imitation ice cream issued by the State department of agriculture. In 
Louisiana, the product was sanctioned by law in 195^-, but a number of injunc- 
tions and associated hearings have prevented development of the industry. The 
first permits to manufacture mellorine in Louisiana were issued in December 
1956. South Carolina enacted legislation in 1955- In Texas, Missouri, and 
Nevada, no specific statutes regulating practices within the industry have 
been enacted. Each of these States relies on its general food laws and the 
regulations of its State board of health. Figure 1 shows the States where 
mellorine may be legally produced. 

General conditions favoring the introduction of a new product, discussed 
later in this report, were favorable throughout all three periods. 

1/ Ice Cream Trade Journal , Vol. h'J , No. 10, October 1951, P- kS» 



- h 



THE LEGAL BASIS OF THE INDUSTRY 

While there is some similarity among the laws of the several States in 
which mellorine may he produced, there are differences which may, in some de- 
gree, account for the different rates by which the industry has developed in 
different States. The character of specific legislation may be discussed in 
relation to a model bill prepared by the American Meat Institute. For conven- 
ience, this bill, designed "to establish definitions and standards of identity 
for, and to regulate the sale of mellorine," will be described in three parts: 
Identity standards; sale, labeling, and advertising; and licensing and enforce- 
ment. 



American Meat Institute Model Bill 



Standards of Identity 

For purposes of this study, comment is limited to the major sections of 
the bill. Mellorine is defined therein as a frozen, pasteurized mix composed 
of edible animal or vegetable fats and milk solids-not-fat in a ratio of 10 
percent food fats and 20 percent food solids including fats. This ratio is a 
minimum standard except where food flavoring is used, in which case the ratio 
may be lowered to 8 and l6, respectively. Minimum weights per finished gallon 
shall be 1.6 pounds of food solids and k.5 pounds total. Vitamin A content 
shall be at least 8,^00 U.S. P. units, with a proportional increase when food 
fat content is greater than 10 percent. The product may be homogenized. 



Sale, Labeling, and Advertising 

The bill provides that mellorine may be sold only in factory- filled novel- 
ties or packages of one-half gallon or less. No bulk sale or soda-fountain 
use is permitted. In effect, mellorine may be sold for home consumption only. 
No suggestion may be made, either in labeling or advertising, that mellorine 
is a dairy product, although a truthful and accurate statement of all the in- 
gredients is permissible. Use of the word "cream" or its phonetic equivalent 
is prohibited. The following items are mandatory in labeling: "Mellorine" 
must appear in as large a type as any other word and in any case be readily 
legible under ordinary conditions of purchase, and there must be: A statement 
of whether the fat used is animal, vegetable, or a blend (no size requirement 
for this • statement); a conspicuous statement of quantity of contents; the 
name and address of the manufacturer or distributor; the number of U.S. P. 
units due to addition of vitamin A. 



Licensing and Enforcement 

The bill provides for reasonable rules and regulations, to be promulgated 
by a designated State official. These rules and regulations shall be the same 



- 5 - 

as those for ice cream plants. Willful violation of the bill's provisions, or 
of the rules and regulations subsequently issued, is to constitute a misde- 
meanor punishable as follows: First conviction, a fine not to exceed $100, or 
imprisonment not to exceed 30 days, or both; subsequent conviction, a fine not 
to exceed $1,000, or imprisonment not to exceed 6 months, or both. The bill 
provides for manufacturing permits renewable yearly. Willful incorporation or 
causing the incorporation of milk fat into a product which would otherwise 
meet the standard of identification for mellorine is to be punishable by a 
90-day suspension of the permit upon such a finding by the designated official, 
A second such finding would result in revocation of the permit. 



Significance of the Bill to the Industry 

The model bill has not been adopted as such by any State, but it appar- 
ently has been used as a guide by legislators who have adapted particular 
sections to local conditions as they saw them. The standard of identity is 
high in relation to the actual standard adopted by States with statutory regu- 
lations. This suggestion, probably to encourage consumer trust and acceptance 
of a new and unfamiliar food product, raises several questions which have not 
been settled by those in or associated with the industry. The literature, 
particularly the trade journals, indicates some differences of opinion con- 
cerning the amount of fat required for a high-quality product. It is diffi- 
cult to evaluate this controversy, however, for it would seem that those 
advocating standards lower than those in the model bill are also concerned 
with the effect on the cost of materials. It is worth noting in connection 
with this controversy that in three of the States where mellorine has had its 
greatest success, Texas, Illinois, and Missouri, there is either no minimum 
fat content (Missouri) or it is lower than 10 percent (Texas, 6 percent, and 
Illinois, 8 percent). 

The second major section of the model bill, concerning sale, labeling, 
and advertising, somewhat limits the choices of manufacturers when deciding 
among alternative methods of marketing. If adopted, this section would limit 
the distribution of mellorine to home use only, apparently to prevent its use 
as a substitute for ice cream in sundaes, malted milks, and other soda- 
fountain products. The limits on container size are based on the premise that 
the risk of fraudulent substitution is greatest where the product is dispensed 
from a bulk package. The container standard might discriminate against mello- 
rine and affect the volume of distribution. 

A second limitation in this section of the model bill raises a number of 
questions. Seemingly, if a manufacturer or dealer wishes to advise the public 
that his product contains nonfat dry milk solids (and he must), he must also 
provide enough space to list all ingredients. Such limitations are not in- 
cluded in the ice cream laws. This labeling requirement, prohibiting the use 
of the word "cream," is in conflict with Federal regulation, which provides 
that a product such as mellorine cannot be shipped legally in interstate com- 
merce unless it is labeled as imitation ice cream. 



The provisions for licensing and issuance of rules and regulations, tied 
as they are to ice cream laws, would seem to have no significant impact on 
marketing. All competitors would be held to the same standards. The section 
on penalties, however, is a different matter. Permits can be revoked for 
blending in milk fat, while failure to meet the standard for mellorine is pun-: 
ishable only as a misdemeanor. In other words, a producer can be prohibited 
from doing business for using some milk fat in mellorine but he can only be 
fined and given a short jail sentence for falling grossly below the minimum 
percent for nonmilk fats . 

An inferior mellorine product, by the provisions of the model bill, re- 
quires court action before a proprietor can be punished, while the use of milk 
fat can lead to the loss of a permit on a finding and motion of a properly 
designated official. In this case, there is no provision for judicial review. 

A permit may be revoked when milk fat is incorporated into a product 
"... which would otherwise conform to the definition and standard of identity 
for mellorine." In some circumstances, this might permit a producer to vary 
his product so that it differs from the definition and standard of identity 
for mellorine. He could, then, according to this section of the model bill, 
blend all the milk and vegetable or animal fats he wishes to, running only the 
risk of a misdemeanor penalty, unless, of course, he were subject to some 
specific provision of the ice cream laws. 

This section of the model bill, particularly the provisions for penalties, 
seems to lay the groundwork for some confusion. 



State Variations from the Model Bill 

Mellorine products are legally salable in 12 States: Alabama, Arkansas, 
California, Illinois, Louisiana, Missouri, Montana, Nevada, Oklahoma, Oregon. 
South Carolina, and Texas. Since no State has adopted the model bill, it 
seems appropriate to consider the essential aspects of State law. Only the 
important variations from the model bill and their significance will be dis- 
cussed, but minor variations and State- to- State comparisons may be seen in 
tables 1, 2, and 3. 



Alabama 

Standards of identity in Alabama are the same as those in the model bill. 
Only factory- filled pints, quarts, or half gallons may be sold. This elimi- 
nates factory- filled novelties from the market for mellorine. The type of fat 
used must follow the word "mellorine" on the label. The word "mellorine" not 
only must be as large and as prominent as any other word on the label, except 
the brand name, but it must also be at least 30-point Gothic type. When arti- 
ficial flavoring is used, it must be so stated on the label. 

The rules and regulations are not tied to ice cream laws; they could be 
made different than those for the manufacture and sale of ice cream. The 



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- 11 - 

penalty for violation is that prescribed for a misdemeanor , regardless of the 
offense. This provision eliminates the discriminatory penalties already noted 
in the model bill. Alabama's law also provides for condemnation and seizure 
of adulterated or misbranded mellorine. 



Arkansas 

Standards of identity in Arkansas are the same as in the model bill with 
two major exceptions. Arkansas authorizes a "mellorine-mix" with the same 
standard as mellorine except that each gallon must contain 3.2 pounds of total 
food solids, weigh not less than 9 pounds, and contain at least 16,800 U.S. P. 
units of vitamin A. If the mix exceeds 10 percent food fats, the vitamin A 
content must be increased proportionately. 

The other major variation in identity standards in Arkansas is found in 
the fact that the act prohibits the use of animal fats. This could well be a 
barrier to interstate commerce both from and to the State. Also, it prevents 
a manufacturer from taking advantage of any significant price variations in 
animal and vegetable fats, and so potentially lowers his profit margin. 

Packages must be labeled "Mellorine- -A Vegetable Oil Product." The 
generic name must be as large and prominent as any word except the brand name, 
and at least 3/8- inch high. Quarterly reports on gallonage are required. 
Taxes, based on gallonage, are the same as for ice cream. 

Enforcement provisions provide for revocation of license after a hearing, 
which is subject to judicial review. Violations are also punishable as mis- 
demeanors . 



California 

California presents a major departure from the model bill and from the 
norm. A vegetable- or animal-fat product may be sold as "imitation ice cream" 
or "imitation ice milk." Thus, labeling requirements agree with Federal stand- 
ards. Sale in bulk is prohibited, but retailers may use the product in mixing 
fountain drinks provided they display a sign in plain block letters at least 
6 inches high so informing the public. Also when the packaged mellorine is 
sold, a sign of similar size and wording must be displayed. The products may 
not be manufactured or sold in the same place as ice cream. The meaning of 
the word "place" in this section of the statute was under attack and not 
settled at the time this was written. 

Obviously, the foregoing provisions have a restrictive tendency on the 
manufacture and sale of mellorine. Requiring it to be labeled "imitation" has 
a debatable effect. Some would express the opinion that such a practice is 
detrimental to the product while others contend that the practice would allow 
mellorine to utilize the same promotion as ice cream. "Imitation" must appear 
conspicuously and be at least half as large as the trade name. 



- 12 - 

Monthly reports on production gallonage and amount of fat used are re- 
quired, as is the case with ice cream. The director of the State department 
of agriculture has the power to establish necessary standards. The only major 
ones known to be in effect at present are requirements of a 10 percent minimum 
of fats for imitation ice cream, k percent minimum of fats for imitation ice 
milk, 1.6 pounds of food solids per gallon of imitation ice cream, 1.3 pounds 
of food solids per gallon of imitation ice milk, and the product must be pas- 
teurized. All ingredients must be named on the label. Although California 
requirements are generally compatible with Federal regulations, differences 
from the legislation of other States would probably hamper interstate shipment. 



Illinois 

A major variation in standards of identity is found in Illinois. Minimum 
fat content is lowered to 8 percent, and to 6 percent when special flavorings 
such as fruits or nuts are used. 

The State does not require vitamin A to be added to the product, and no 
weight requirements are fixed. The generic name "mellorine" is not adopted. 
Instead, the product must be labeled in 12-point capital letters "Vegetable 
and/or Animal Fat Frozen Dessert" in a color contrasting with that used for 
the brand name. This requirement neither satisfies Federal regulations nor is 
it in conformity with the labeling used in most other States. Although it may 
afford adequate protection for consumers and competing foods, it also poses 
problems in interstate shipment and sale. 

All ingredients must be stated on the label, with no one ingredient given 
any undue prominence. Sale is restricted to factory- filled containers of two 
fluid quarts or less . No device tending to suggest a dairy product by word or 
its phonetic equivalent may be used. This provision appears to afford slightly 
more protection to consumers and competitors than similar provisions in some of 
the other States. It is, at least, more explicit. 

Enforcement provisions are quite comprehensive. Criminal penalties are 
equivalent to those for a misdemeanor, and injunctive relief is expressly pro- 
vided. Certificates of approval may be refused or revoked by the director of 
the State department of agriculture, subject to judicial review. Inspection 
of plants is expressly authorized, and rules and regulations are not tied to 
ice cream laws. 



Missouri 

There are no laws prohibiting the manufacture or sale of mellorine in 
Missouri. The ice cream and filled milk laws of the State do not cover mello- 
rine (filled milk is milk in which the butterfat has been replaced with veg- 
etable fat). No standards of identity or enforcement procedures are in force 
but labeling requirements have been established administratively by the Divi- 
sion of Health. Seemingly, there are no limitations on the manufacture and 



- 13 - 

sale of vegetable- or animal-fat frozen desserts, aside from the general food 
and drug provisions. However, the product must be labeled "imitation ice 
cream." 



Montana 

Standards of identity for mellorine have not been established by statute 
and cannot be established without legislation under the Montana frozen food 
product laws. The name "mellorine" is not adopted, but labels must carry, in 

boldfaced letters, the legend " Fat Product" (Animal, Vegetable, or 

Animal-Vegetable). All ingredients except colorings, flavorings, or spices 
must be listed specifically, and no suggestion that the product is ice cream 
can be made . 

The label "Imitation Ice Cream" required by Federal regulations might 
possibly constitute such a suggestion. In a sense, that was the Food and Drug 
Administration argument, rejected by the majority of the justices, in the 
"Imitation Jam Case" 2/. This situation, however, definitely poses a problem 
relative to interstate commerce for the Montana product. 

No restrictions on the form in which the product may be marketed are 
found in the statutes. This, of course, gives the product a much larger poten- 
tial market than is true under the model bill and most State statutes. Sani- 
tary requirements, reporting, and licensing are the same as for all other 
frozen food products. Enforcement is obtained through court action, civil and 
criminal, on motion of the commissioner of agriculture, who has been granted 
inspection powers. 



Nevada 
In Nevada, mellorine was formerly listed as illegal, but it is now a 
legal product under regulation by the public service division, department of 
food and drugs. Products simulating ice cream must be labeled "Imitation Ice 
Cream." Further regulation is contemplated, but at the time of this study 
none had been promulgated. 



Oklahoma 

Provisions in Oklahoma differ considerably from the model bill. The 
standard of identity requires only 6 percent fat and 10 percent milk solids. 
However, no provision is made for lowering fat content when flavorings are 
added. Vitamin A need not be added, and the product need not be pasteurized. 

2/ 62 Cases of Jam, et. al., v. United States , 3*KD U. S. 593 (1951). 



- 14 - 

Oklahoma also authorizes a low-fat product comparable to mellorine except 
that it may contain no less than 3.25 percent edible fat and 7.75 percent milk 
solids. Mellorine may enter any market with only these restrictions: When 
sold in containers larger than a half gallon, it cannot he flavored or colored. 

"Mellorine" or "Mello freeze- -A Fat Product" must appear on the label in 

letters at least 3/8-inch high. A sign naming the product in letters at least 
2 inches high must be displayed wherever the product is dispensed at retail. 
Containers filled at retail from labeled mellorine bulk containers are exempt 
from the labeling requirement. No misleading labeling or misleading advertis- 
ing is permitted. Nevertheless, under the Oklahoma law, mellorine may be ad- 
vertised and labeled as "A Frozen Dairy Product," but the use of the term 
"dairy" would violate Federal lav. Taxation, based on gallonage, is the same 
as for ice cream. No provision is made for revocation of licenses. Enforce- 
ment may be had by injunction, seizure, and prosecution as a misdemeanor. 



Oregon 

Standards of identity in Oregon vary from the model bill in several re- 
spects. Vitamin A need not be added. Food fat m i r n mi mi is set at 3-2 percent, 
with at least 10.8 percent milk solids and 28 percent total food solids. The 
product may be sold only in factory- filled containers, but there is no restric- 
tion on the size of containers in which it is to be sold. The label must bear 
the word "mellorine" in letters no smaller than the largest ones used on the 
package. The generic term must be followed by the phrase "containing animal 
fat" or "containing vegetable fat" in letters at least 3/8-inch high. The 
percentage of fat used must be disclosed. Enforcement is handled by the powers 
of seizure and license revocation. 



South Carolina 

The pertinent law of South Carolina is a replica of the model bill with 
four exceptions. First, sale is limited to pints, quarts, or half gallons, 
thus eliminating factory- filled novelties. Second, the term "frozen dessert" 
is substituted for "mellorine" in labeling. Third, the rules and regulations 
which the commissioner of agriculture is empowered to promulgate are not tied 
to existing ice cream law. Fourth, power to revoke licenses is not given. 
This eliminates the constitutional problem found in the model bill, but it also 
weakens enforcement machinery. 



Texas 

The legal basis for mellorine in Texas is greatly different from the model 
bill. The only regulations existing pertain to a standard of identity and a 
prohibition against the use of the word "cream" or its phonetic equivalent. 
The standard of identity provides for a minimum of 6 percent food fat and a 
minimum of 30 percent total food solids. Other than for these regulations, 
only the general food and drug laws apply to the product. No other restrictions 



- 15 - 

are placed on the markets which the product may enter, the form in which it may 
"be sold, or the way in which it is labeled and advertised, except that use of 
the word "cream" is prohibited. 



Louisiana 

Standards of identity for mellorine in Louisiana are the same as in the 
model bill. Package size requirements also are the same. Labels must contain 
the phrase "mellorine — an imitation ice cream made with vegetable or animal 
fat." The words "mellorine, vegetable or animal fat" must be in letters as 
large as any on the package. The other words in the phrase must be half as 
large as the name of the product. A label must be approved by the State board 
of health before use. 

Other nonmilk-fat products are also standardized. "Olarine" is the same 
as mellorine except that fat content may be lowered to 3.5 percent, food solids 
to 10 percent, vitamin A to 2,9^ U.S. P. units, with 1.3 pounds of total food 
solids. Other products authorized are "Sherine" and "Fruit Sherine," both low- 
fat products . 

Special enforcement provisions are not included in the rules and regula- 
tions for frozen desserts. Such enforcement is apparently to be carried out 
under general food and drug statutes. 

Summary of State Laws 

There is considerable variation from State to State regarding the manufac- 
ture and sale of mellorine. Its competitive position relative to ice cream 
varies considerably as standards of identity and markets open to the product 
vary. 

Perhaps the major problem is posed (at least for the future) in the realm 
of interstate commerce. Only two of the States permitting sale of mellorine 
have the same labeling requirements as those required by Federal authorities. 
In addition, variations in standards of identity may well minimize the possi- 
bility of manufacturing in one State and selling in another. This would be 
particularly true of smaller operators who could not afford to make two or more 
kinds of products or to purchase and use two or more types of containers. 

Literature on the subject indicates that one of the greatest problems 
faced in setting ice cream standards has been the great variation in State 
standards. From the present trend, mellorine could well find itself faced by 
the same problem. 



16 



SURVEY OF THE INDUSTRY 

A mail questionnaire was sent to makers of mellorine to learn the facts 
about plants entering the industry, production, manufacturing processes, and 
marketing. All known manufacturers of the product were circularized. 

The return of completed schedules reached 30 percent before the cut-off 
date. Careful analysis indicated the return to be adequate for a represent- 
ative sample of the whole industry, but limitations should be applied to 
smaller breakdowns of the sample. 

Data are presented for five plant size categories where these data are 
applicable. Plant sizes are based on each manufacturer's total output of 
frozen desserts, including only the output of finished product. Many plants 
produce and sell "mix," which is the semi-finished combination of ingredients 
ready for freezing. Some plants produce only the mix. Class I includes those 
plants whose annual production of frozen product was less than 250,000 gallons, 
class II, 250,000 to 500,000 gallons; class III, 500,000 to 800,000; class IV, 
in excess of 800,000. Class V includes those plants whose annual production 
could not be ascertained. Most of them appear to have produced only mix. 

State data are given for Illinois, Missouri, Oklahoma, Texas, and "all 
other States," except where data from the "all other States" category are 
clarified or stressed, in which case the States are listed separately. Class- 
ification of the States in this manner is not intended to minimize the impor- 
tance of the remainder of the States, but rather to recognize the limitations 
of the sample. 



Initial Manufacture 

The benchmark for the beginnings of mellorine in a given area is the date 
when the respondent first found the product on sale in the market area. Of 
the respondents, 15 percent reported that mellorine appeared in their market 
areas before 1950 (table k) ; l6 percent said it entered their market areas in 
1950 ; 18 percent, in 1951; 29 percent, in 1952; and 13 percent, in 1953- In 
195^ and 1955; 9 percent of the vegetable-fat frozen dessert producers report- 
ed the first appearance of the product in their regions. 

The year 1952 accounted for the largest annual appearance of mellorine in 
the market areas. In the following year, 1953 > "the majority of the States 
where mellorine is legal passed legislation regulating the production and dis- 
tribution of mellorine. 

Distribution of the data by States shows the first reported market ap- 
pearance occurred in California in I9V3. This does not contradict the claim 
that mellorine as it is now known was first produced in Corsicana, Tex., in 
19^2. It indicates only that for those plants replying to the questionnaire, 
the first observation of the presence of the product, probably a "mix," was in 



- 17 - 

California in 19^+3 • Table 5 shows the appearance in the various market areas 
as reported in the questionnaires. 



Table U.--Year of mellorine appearance in market areas of responding plants, 

by size of plant 



Size of plant l/~ 



Year 



Under : 250,000- 
250,000 : 500,000 
gallons : gallons 



500,000- 
800,000 

gallons 



More than 
800,000 
gallons 



Size 

unknown 



All 
plants 



19^3 • 

±9kk . 

19^5 . 

19^6 . 

19^7 . 

19^+8 . 

19^9 • 

1950 . 

1951 • 

1952 . 

1953 • 
195^ • 
1955 • 

Total 



2 
2 

2 
2 
6 
5 

11 

5 
k 



TTT 



16" 



13 



19 



16" 



1 
2 
2 

5 

5 
17 
19 
30 

13 
7 

2 



ToT 



1/ Size based on 1955 production. 



When Plants Began Producing 



Respondents to the questionnaire also reported the year when they began 
the manufacture of mellorine in their own plants. The year manufacturers be- 
gan production generally coincides closely with the year that the product first 
appeared in the market area. Forty- four percent of the replies indicated that 
the companies began the manufacture of vegetable-fat frozen desserts in 1952 
(table 6). 

Only 8 percent began operations prior to 1950. Seven percent began in 
1950, and 12 percent in 1951* Following the peak of 1952, the number entering 
the industry declined; only 16 percent entered the field in 1953; an d from 
1953 to 1956, only 13 percent of the manufacturers replying to the question 
began making the product. Five percent of the respondents did not reply to 
the question. The data indicate that the larger plants entered the industry 
at a later date than did the smaller producers. 



- 18 



Table 5«" 



■Year of mellorine appearance in market areas of responding plants 
by States 



Year 



' Illinois ' Missouri ' Oklahoma 



Texas 



Other : 
States 1/ : 



Total 



19^+3 : — — — — 1 1 

19^ : 

19^5 : — — — 1 — 1 

19^6 : — — 1 1 — 2 

19^7 : — — 1 1 — 2 

19^8 ': — — — 5 — 5 

19^9 : 2 — 1 2 — 5 

1950 : 3 6 2 6 — 17 

1951 : h 1 3 11 — 19 

1952 : 17 h h 3 2 30 

1953 : 3 — --- 1 9 13 

195^ : — -— 1 — 6 7 

1955 : — — — — 2 2 

Total : 29 11 13 31 20 lplt- 

l7 Includes Alabama, Arkansas, California, Montana, Oregon, and South 

Carolina. No data were reported from Nevada, and no plants were licensed in 

Louisiana until late in 1956. 



Illinois had the largest number of starts in any one year, 20 plants be- 
ginning operations there in 1952. Texas reported 12 in the same year. The 
Illinois figure represents 69 percent of the total replies from that State. 
The 12 starts in Texas represent 39 percent of the total; however, k8 percent 
of the Texas plants were already manufacturing mellorine by that year. The 
"all other States" group had the highest entrance into the field in 1953 an -d 
1951+ (table 7). 

From the foregoing information, it was possible to ascertain something 
about the time lag between the appearance of the product in market areas and 
the time when manufacture began there. Questionnaire data indicate that the 
two smaller producing categories differed from the two higher groups. Fewer 
of the smaller producers entered the field in the same year the product was 
introduced in the area. In the lowest two producing groups together, less 
than half of the plants reporting began making the product the year it was 
introduced in their immediate areas. 



The two larger groups, the class III and class IV plants, indicated that 
6l percent and 58 percent, respectively, began production the same year the 
product appeared in the plant market area. Table 8 illustrates the data. 



19 



Table 6. --Year in which responding plants began manufacture of mellorine, by 

size of plant 









Size of 


plant 1/ 






Year 


Under 
250,000 
gallons 


: 250,000- 
: 500,000 
: gallons 


: 500,000- 
: 800,000 
: gallons 


: More than 
: 800,000 
: gallons 


Size 

unknown 


; mi 

' plants 


19^3 

19H 


1 


— 


— 


— 


— 


1 


19^5 

19^6 . .o 

19^7 


1 


— 


— 


— 


— 


1 


19^8 .0 

19^9 

1950 

1951 

1952 


2 
2 
3 
5 
11 


1 
1 
2 

6 


1 
1 
7 


1 

1 

2 

12 


1 

2 

10 


2 

k 
7 

12 

k6 


1953 

195^ 

1955 

1956 ........ 


8 
5 
1 
1 


3 

2 

1 


3 
1 


2 
1 


1 
2 


17 

10 

3 

1 


Total 


kO 


16 


13 


19 


16 


104 



T/ Size based on 1955 production, 



If the time-lag data presented above are considered by States, the rela- 
tionships become all the more interesting. Of the k- leading States producing 
mellorine, only 1, Illinois, indicated that more than half of the plants re- 
sponding began the manufacture of mellorine in the same year it appeared in 
the market area. In Texas, on the other hand, only 35 percent began operations 
during the same year, with another 35 percent starting operations the following 
year. Missouri had ^5 percent in the same year, and Oklahoma only 23 percent. 

These data indicate that most of the plants in the larger producing States 
waited until some time after the product appeared before beginning the manu- 
facture of mellorine. The reasoning behind this time lag is a matter for con- 
jecture, and can only be indicated through personal interviews with manufac- 
turers. However, later in the study, when the reasons given for entering the 
mellorine field are presented, some explanation for the lag is brought to 
light. Table 9 presents the time-lag data by States. 



Manufacturers of mellorine were questioned about their reasons for enter- 
ing the field. The responses indicated that 66 percent of the producers began 
making mellorine to meet competition of other manufacturers making the product, 



20 



Table 7. --Year in which responding plants began manufacture of mellorine 

by States 



Year 


Illinois 


] Missouri 


j Oklahoma j 


Texas 


: Other 
: States 1/ 


Total 


1943 














1 


1 


1944 




















1945 

1946 








1 








1 


19^7 




















1948 

19^9 

1950 

1951 

1952 


1 

1 

3 

20 


2 

7 


1 

1 
1 
5 


1 
3 
3 
8 
12 


2 


2 

4 

7 

12 

46 


1953 

1954 ....0.... 

1955 • 

1956 


3 
1 


2 


2 
1 
1 


3 
1 


7 
8 
2 


17 
10 

3 
1 


Total 


29 


11 


13 


31 


20 


104 



T7 Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. Also, see note l/, table 5« 



Table 



•Length of time after mellorine appeared in their market areas that 
responding plants started manufacture, by size of plant 



Size of plant 1/ 



Time 



Size 



Under : 250,000-: 500,000- :More than: 
250,000 : 500,000 : 800,000 : 800,000 : ^^,. 
gallons : gallons : gallons ; gallons 



All 
plants 



In same year . . . 
One year after , 
Two years after 
Three or more 

years after . , 
No answer • , 



21 

14 

1 



6 

10 



11 
2 
3 



40 



— 



Total 

~T/ Size based on 1955 production, 



13 



19 



10 
2 
1 

2 
1 



~ 



56 
32 

5 



104 



21 



Table 9. — Length of time after mellorine appeared in their market areas that 
responding plants started manufacture, by States 









Plants in 


-- 






Time 


Illinois 


' Missouri 


' Oklahoma ' 


Texas 


: Other 
: States 1/ 


Total 


In same year 

One year after . . . 
Two years after . . 
Three or more 

years after .... 


Number 

19 
9 
1 


Number 

5 
1 
3 

1 
1 


Number 

3 
9 

1 


Number 

LL 

11 

1 

7 

1 


Number 

18 
2 


Number 

56 

32 

5 

9 
2 






Total 


29 


11 


13 


31 


20 


104 



1/ Includes Alabama, Arkansas, California, 
Carolina. Also, see note l/, table 5. 



Montana, Oregon, and South 



An additional 25 percent indicated that the hope to increase the market for 
their frozen desserts was their basic motive. The remaining 9 percent either 
did not answer the question or indicated that their entrance was due to other 
and minor causes. 

It should be noted in the following two tables that the total number of 
respondents is 11 k rather than the 10^ indicated in the previous tables. This 
difference is due to the fact that 10 of the returned schedules placed an 
equal weight on the 2 factors of meeting competition and increasing the market 
for frozen desserts. 

Of the class I plants, which are the smallest producers, 53 percent stated 
that desire to meet competition caused them to enter the industry. Of the 
class II, III, and IV producers, 87.5? 85, and 70 percent, respectively, indi- 
cated that competition influenced their decision to produce the product. Table 
10 presents these data by plant size. 



When the same data are considered on the basis of returns by States, the 
situation is like that presented on the basis of plant size. In all these 
States, the major reason for starting to make mellorine was to meet competi- 
tion. It therefore seems that many manufacturers must have waited and observed 
the actions of their competitors before starting manufacture of mellorine. 
Such hesitation for observation would account for some of the time lag between 
the introduction of the product in market areas and the date on which particu- 
lar plants began producing mellorine . 

Several of the responding operators of plants stated unusual reasons for 
entering the industry. Among these were the desire to be first in the area 
with a new product, and the desire to increase profits by supplying a popular 



- 22 - 

demand and by catering to the lower income groups. Table 11 lists by States 
the reasons reported for entering the industry. 

Table 10. --Reasons responding plants cited for starting mellorine manufacture 

by size of plant 





Size of plant 1/ 


Reason 


Under 
250,000 
gallons 


: 250,000- 
: 500,000 
: gallons 


: 500,000- 
: 800,000 
: gallons 


:More than 
: 800,000 
: gallons 


• Size 
"unknown 


: Total 


To meet competition . . . 
To increase market .... 
Other 


25 

Ik 

7 

1 


14 

1 
1 


11 
2 


14 
6 


12 
5 
1 


76 
28 

9 
1 








Total 2/ 


47 


16 


13 


20 


18 


114 



1/ Size based on 1955 production. 

2/ Some plants gave more than one reason. Consequently, the total is 
greater than the number of plants in the sample . 

Table 11. --Reasons responding plants cited for starting mellorine manufacture 

by States 







Plants in-- 










Reason 


Illinois ' 


Missouri ' 


Oklahoma j 


Texas 


Other 
States 1/ 


Total 




Number 


Number 


Number 


Number 


Number 




Number 


To meet competition . . „ 


20 


7 


11 


26 


12 




76 


To increase market .... 


10 


3 


2 


5 


8 




28 


Other 


3 


__ 


__ 


3 


3 




9 


No answer .. 




1 


-- 








l 






Total 2/ 


33 


11 


13 


3k 


23 




114 



T/ Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. Also, see note l/, table 5* 

2/ Some plants gave more than one reason. Consequently, the total is 
greater than the number of plants in the sample. 



Discontinuances 



While the number of plants manufacturing mellorine has increased rapidly, 
the data indicate that several plants have discontinued making the product „ 
New firms have entered year by year, and some old firms have left the field. 
No plants dropped out of production before 1955, but in that year four re- 
sponding manufacturers decided to do so. In the following year, 1956, one 
other reporting company ceased manufacturing mellorine. 



- 23 - 

Three of these five plants leaving the field were in the smallest plant 
category (class I). The remaining two were in the unclassified category. 

One firm in Illinois ceased making the product , while two firms in 
Missouri ceased operations. In the "all other States" category, there were 
two plants recorded. These were in Alabama and Montana. The reported reasons 
for discontinuing mellorine manufacture indicate that k of the 5 plants stopped 
making the product because consumer demand decreased. The remaining plant in 
the list was sold, and no further data on its operations are available. 

Available data show other plants in the same, or nearby, market areas 
were continuing to operate; in fact, some were showing increases in the pro- 
duction of mellorine. It seems possible, therefore, that the four respondents 
listing lack of consumer demand as the reason for ceasing operations may have 
had some other reason, known or unknown, that caused the decision to cease 
production . 



PRODUCTION VOLUME 

Since practically all of the plants surveyed make either some or all of 
the other frozen desserts — ice cream, sherbet, and ice milk- -their mellorine 
production volume is more significant when related to the volume of the other 
products. 



Frozen Products 

Total production of mellorine in the States where manufacture is permitted 
has been growing in recent years, but by a smaller percent each year. In 1952, 
production totaled 11,188,000 gallons; in 1953, 2^,207,000 gallons; in 195^, 
31,^19,000 gallons; and in 1955, 33,009,000 gallons (table 12, fig. 2). The 
estimate for 1956 is 33^3^-5^000 gallons. In each of these years, the percent- 
age increase has become smaller; and in the last two, it was below the gain 
shown for ice cream. Total production of ice cream in 1956 was 650,935^000 
gallons . 

It should be noted that mellorine production in 1953 an( 3- 195^ made the 
most spectacular percentage gains of all the products. However, the produc- 
tion figures show an increase of 15,^+09*000 gallons in ice milk production in 
195^; which was only 23.7 percent; while a production increase of only 
7,212,000 gallons of mellorine was a percentage increase of 29.8 percent. The 
relatively spectacular percentage rise of mellorine results from the compara- 
tively small base. 

Still another relationship between mellorine and other frozen desserts in 
the 12 States where mellorine is legal should be brought out. The plants in 
these States responding to the questionnaire furnished not only data on their 
mellorine production, but also on the gallonage output of other types of 
frozen desserts. Table 13 is based on these data, and shows what percentage 
mellorine was of total frozen dessert production in these plants. For all 



- 24 - 



Table 12. — Production of frozen desserts by type, United States, 1952-1955 

(thousands of gallons) 





Ice cream 


Ice milk : 


Sherbet : 


Mellorine 


Year 


Volume :Percent: 


Volume 


:Percent: 


Volume 


Percent : 


Volume :Percent 




produced: change : produced 


. change : produced 


change : p ro due e d : change 


1952 


592,705 — 


53,702 





25,637 





11,188 


1953 


605,051 +2.1 


64,710 


+20.5 


31,079 


+21.2 


24,207 +116.4 


1954 .0.0. 


596,821 -1.4 


80,019 


+23.7 


34,170 


+ 9.9 


31,419 + 29.8 


1955 1/ • • 


628,559 +5-3 


88,966 


+11.2 


37,036 


+ 8.4 


33,009 + 5.1 


1956 2/ . . 


650,935 +3.6 


96,949 


+ 9.0 


36,050 


- 2.7 


33,345 + 1.0 



T/ Preliminary. 
2/ Estimated. 

Source: 1952-55 Production of Manufactured Dairy Products 1955* Agricultural 
Marketing Service, Statistical Bulletin No. 199, November 1956. Table 2, 
page 5; 1956 Milk Production on Farms and Statistics of Dairy Plant Products, 
1956. Agricultural Marketing Service, February 1957« Table 8, pp. 8-9. 



Table 13-- -Mellorine production as a percent of all frozen dessert production 
in responding plants, by size of plant 





Size of plant 1/ 


Year 


Under : 
250,000 : 
gallons : 


250,000- : 
500,000 : 
gallons : 


500,000- 

800,000 

gallons 


: More than 
: 800,000 
: gallons 


; Size 

: unknown 


; ah 

' plants 




Percent 


Percent 


Percent 


Percent 


Percent 


Percent 


1949 


27.1 


4.7 





15-2 





16.2 


1950 


21.4 


2.4 





10.9 





13.9 


1951 


25.6 


1.2 


1.3 


10.3 





H.5 


1952 


31.2 


11.9 


4.1 


13.5 


45.5 


15.7 


1953 


33-3 


18.5 


10.9 


19.2 


70.0 


22.8 


1954 


34.3 


24.0 


15.9 


22.2 


37.3 


24.5 


1955 


31.1 


20.7 


17.2 


23.0 


37.3 


24.4 


1/ Size ban 


;ed on 1955 


production 


See p. 


16. 







responding plants in these States during the years 1949 through 1955, mello- 
rine ranged from 11. 5 percent to 24.5 percent of total output. From 1950 
through 1955, the percentage rose steadily, and in the last 2 of these years 
was almost one-fourth of their total production. Mellorine was a consistently 
larger percentage of the output of the smaller plants than of larger plants. 



- 25 - 

MELLORINE PRODUCTION 

United States, 1952-56 



MIL. GAL. 



30 



25 



20 



15 



10 




1952 1953 1954 1955 1956 



U. S. DEPARTMENT OF AGRICULTURE 



NEC. 4253-57(5) AGRICULTURAL MARKETING SERVICE 



Figure 2 



- 26 - 

The data presented "by States in table 14 show that Texas plants in recent 
years have devoted more of their production to mellorine than have plants in 
other States, and Oklahoma plants made more than 2.6 gallons of mellorine out 
of every 10 of all frozen desserts. The portion has been smaller in the other 
States, but nevertheless significant. 



Table l4.< 



■Mellorine production as a percent of all frozen dessert production 
in responding plants, by States 



Year 


Illinois 


Missouri 


Oklahoma 


Texas 


Other 
States 1/ 


: All 
: States 




Percent 


Percent 


Percent 


Percent 


Percent 


Percent 


19^9 


0.3 





38.7 


±k.6 





16.2 


1950 


3.9 


0.5 


37.8 


20.5 





13.9 


1951 


3.8 


0.5 


21.6 


12.6 





11-5 


1952 


10.0 


9-7 


24.5 


24.1 





15.7 


1953 


16.2 


13-4 


22.7 


38.1+ 


4.3 


22.8 


1954 


14.8 


14.3 


27.7 


1+4.5 


4.4 


24.5 


1955 


13-0 


21.1 


26.3 


44.3 


7.3 


24 4 



1/ Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. Also, see note l/, table 5« 



In interpreting these figures, one must not assume more than their actual 
meaning. They signify only the percentage of mellorine in the plants sampled. 
They do not indicate a percentage for all frozen dessert plants or for total 
frozen dessert production in each of the States. Not all frozen dessert 
plants manufacture mellorine . 



Mellorine production data by States indicate the location of gains during 
the period 1952-1955 (table 15). The only States showing a reduction in mello- 
rine production during a specific year were California, Missouri, and Illinois. 
Illinois registered a decline from 1953 to 1954, but gained again in 1955* 
From 1952 to 1953; Illinois had an increase in volume of mellorine. California 
has never shown a marked increase in production. This may be due to the State 
law barring the manufacture and sale in the same place where ice cream is made 
and sold. Missouri's rather sharp decrease in 1955 is not easy to explain. 
There has been, however, a strong effort in the legislature to bar production 
of mellorine in the State, making for uncertainty both for present manufactur- 
ers and those thinking of entering the industry. 

Production gains from 1953 to 1954 ranged from a low of 14.2 percent in 
Oregon to a high of 157 •! percent in Alabama (there was a decline in Illinois 
alone). United States production increased by 116.4 percent between 1952 and 
1953, and by 29.6 percent from 1953 to 1954 (table 15). The range of increases 
in 1955 from 1954 was wide and reflected substantially the changes that might 
be expected. In the newer producing areas, percentage increases would tend to 



27 





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- 28 - 

be larger, if for no cause other than a small base in the percentage calcula- 
tion. In the States where production has a longer record, such as Texas, the 
increases would be smaller. Overall, a 5.2 percent increase was registered. 

In order to ascertain the importance of mellorine in the States, the 
findings from the questionnaire and data regularly reported by the Agricul- 
tural Estimates Division of the Agricultural Marketing Service were used. The 
Division's enumerations of mellorine production began in 1952; however, it is 
possible to trace the data back to 19^9 "by utilizing findings from the ques- 
tionnaire survey. A careful check of the results of the mail schedule returns 
indicated that the data were comparable to the enumerations. It is felt that 
no serious discrepancies arise from the combination,, 

Texas has been, and continues to be, the largest single producer of mel- 
lorine (table 16). Next in rank of importance comes Illinois, followed by 
Oklahoma and Missouri in that order. Alabama, Arkansas, California, Montana, 
Nevada, Oregon, and South Carolina combined accounted for 10.9 percent of 
total production in 1955' It should be recalled, however, that some States 
with small production have been making mellorine for only a short time. This 
would account, in part, for their small volume. 



Table l6. — Percentage distribution of mellorine production for responding 
plants, by States, 19^9-1955 





Plants responding 


USDA enumerations l/ 


State 


to questionnaire 












19^9 : 1950 : 1951 


: 1952 1/ 


1953 1 


/:195^ 1/ 


: 1955 1/ 




Percent Percent Percent 


Percent 


Percent 
0.2 


Percent 


Percent 


Alabama 




0.5 


l.k 


Arkansas 








• 7 


1.0 


1.6 


California 








k.l 


7.2 


6.3 


Illinois 


1.2 10.8 6.6 


22.1 


21.9 


14.9 


15-6 


Missouri 


1.5 .7 


16.0 


10.3 


9.6 


7.9 


Montana 


— — — 





.3 


.k 


.5 


Oklahoma . . . <, 


19.5 10.6 11.0 


h-9 


9.2 


9.3 


9.2 


Oregon 


— — — 


— 


1.1 


• 9 


1.1 


South Carolina . . . 


— — — 


— 







2/ .1 


Texas „ 


79-3 77-1 81.7 


57.o 


51.6 


56.2 


56.3 


Total 


100.0 100.0 100.0 


100.0 


100.0 


100.0 


100.0 



~TJ Data from Production of 



195^ (mimeo.) U. S. Department of Agriculture, 
1955 (unpublished data). 

2/ Includes production of Nevada. 



'Mellorine Type" Frozen Desserts, 1952, 1953, 



Agricultural Marketing Service, 



Since very little mellorine enters into interstate commerce, production 
figures for any given State are in general contingent on the demand and supply 
relationships within that State. 



- 29 - 

Production data on the "basis of size of plant show some interesting trends 
(table 17). After the initial years, when production was fairly evenly dis- 
tributed between "small" and "large" plants, the trend has been for the "large" 
plants, with a capacity of 800,000 gallons or more, to produce an increasing 
share of the total. Prior to 1952, the plants with the smallest production 
produced a substantial part of the total mellorine made. From 1952 to the 
present, however, the relative importance of these smaller producers has de- 
clined to a point where they produce less than 12 percent of all the mellorine. 



Table 17. — Percentage distribution of mellorine production for responding 
plants, by size of plant, 19^9-1955 









Size 


of plant 1/ 






Year 


Under 


: 250,000- 


500,000- 


: More than 


j Size ; 




250,000 


: 500,000 


800,000 


: 800,000 


Total 




gallons 


: gallons 


gallons 


: gallons 








Percent 


Percent 


Percent 


Percent 


Percent 


Percent 


19^9 


ko.6 


k.k 





55.0 





100.0 


1950 


55.0 


1.6 





43.4 


___ 


100.0 


1951 


53.0 


1.5 


l.k 


kk.l 





100.0 


1952 


19. k 


6.3 


3.2 


55.3 


15.8 


100.0 


1953 


14.7 


7.2 


6.5 


50.9 


20.7 


100.0 


195^ 


14.1 


7.7 


Q.h 


51.6 


18.2 


100.0 


1955 


11.8 


7.7 


8.6 


55.4 


16.5 


100.0 


1/ Size I 


>ased on 1955 production „ 









Mix Production for Others 

Production of frozen mellorine and production of mellorine mix are both 
factors in the industry. Not all plants that manufacture frozen mellorine 
produce all the mix they use. On the other hand, many plants do not use all 
the mix they produce; they sell surplus production to other manufacturers. 
Still other plants manufacture mix only, and some make no mix at all but only 
freeze the mix they purchase from others. 



Production by respondents of mix for sale to other users has greatly in- 
creased since 1951 (table 18). In that year, mix for sale constituted only 
2.8 percent of the total mix produced. In 1952, this rose to 21.8 percent of 
the total. Mix for sale was 27.3 percent of the total in 1953, and then 
leveled off to slightly under 25 percent in 195^ and 1955. The plant size 
data indicate that the unclassified, or "size unknown" group produced the most 
mix for sale to other users. This product for sale constituted 100 percent or 
slightly less for this group for all the years they produced mix. Since plant 
size classification was based on the amount of frozen mellorine produced, and 



- 30 - 

since these plants in the "size unknown" category produced no frozen mellorine, 
it follows that their production was in mix for sale to other users (see p. 16 
of this report) . 



Table 18. — Percent of total mellorine mix made by responding plants, 
and sold to others for freezing, 19^9-1955 



by size. 









Size of 


plant 1/ 






Year 


Under 
250,000 


: 250,000- : 
: 500,000 : 


500,000- 
800,000 


: More than 
: 800,000 


' Size 
• unknown 


; mi 

■ plants 




gallons 


: gallons : 


gallons 


: gallons 








Percent 


Percent 


Percent 


Percent 


Percent 


Percent 


19^9 











10.0 





5.5 


1950 











8.8 





3. '8 


1951 oo 


2.5 








3.3 





2.8 


1952 ....0.... 


10.8 


0.2 


10.8 


6.5 


99.3 


21.8 


1953 


9.6 


.k 


21.1 


7.8 


99.3 


27.3 


195^ 


9.3 


.0 


5-3 


9.4 


100.0 


2^.8 


1955 


11.4 





7.2 


11.2 


100.0 


24.7 


1/ Size base 


;d on 1955 production. 











State percentages show that the largest portion of the mix for sale is 
produced in Texas (table 19) • Oklahoma ranks second in this category, and 
Illinois and Missouri follow. Production of mix for sale in the "all other 
States" category is small. Respondents in Alabama, California, Oregon, and 
South Carolina indicated that they made no mix for sale to other users. These 
data raise the question whether there is a degree of specialization emerging 
in the mellorine field, but evidence from respondents is not conclusive. 

The number of responding plants that sell mellorine mix to others for 
freezing is relatively small in comparison with the total plants producing 
mellorine in the 12 States (table 20). Not until 1952 did the number exceed 
10 percent of all those reporting, and even in 1955 the number made up less 
than 20 percent of the respondents . The number has been so small through all 
of the years for which information was obtained that no real pattern emerges 
from the plant size categories. 



The data by States in table 21 show that Texas has more plants selling 
mix to others than the other States. Illinois is the only other State whose 
number approaches significance. 



31 



Table 19 . — Percent of total mellorine mix made by responding plants, by State 
of location, and sold to others for freezing, 1949-1955 



Year 


Illinois 


: Missouri 


: Oklahoma 


Texas 


Other 8 States 1/ 




Percent 


Percent 


Percent 


Percent 


Percent 


19^9 











6.9 





1950 











M 





1951 











3-4 





1952 


4.5 


2.6 


14.4 


35.9 





1953 


4.1 


.5 


22.1 


44.4 


2.4 


1954 


4.2 


.3 


8.9 


37.9 


8.4 


1955 


4.5 


6.0 


10.0 


38.2 


3-8 



1/ Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. Also, see note l/, table 5« 



Table 20. — Responding plants that sell mellorine mix to others for freezing. 

by size of plant 









Size 


of plant . 


L/ 






Year 


Under 


. 250,000- 


: 500,000- : 


More than 




Size * 




250,000 


: 500,000 


: 800,000 : 


800,000 




unknown ' 


Total 




gallons 


. gallons 


: gallons 


gallons 








Number 


Number 


Number 


Number 




Number 


Number 


1949 











1 







1 


1950 











1 







1 


1951 


1 








1 







2 


1952 


3 


1 


2 


4 




4 


14 


1953 


4 


2 


3 


5 




5 


19 


1954 


5 


1 


3 


5 




6 


20 


1955 


4 





3 


5 




6 


18 



T/ Size based on 1955 production. 



MANUFACTURING 



The basic difference between mellorine and other frozen desserts lies in 
the type of fat utilized in the manufacture of the finished product. Mellorine 
producers use vegetable fats, animal fats, or a blend of the two instead of 
butterfat which is used in making ice cream and ice milk. However, the manu- 
facturing process is not simple; it is closely related to that for ice cream. 



32 



Table 21. — Responding plants that sell mellorine mix to others for freezing. 

by States 



Year 


Illinois 


| Missouri 


j Oklahoma 


Texas 


: Other 
: States 


V 


Total ; 




Number 


Number 


Number 


Number 


Number 


Number 


19^9 o 











1 







1 


1950 











1 







1 


1951 











2 


___ 




2 


1952 


k 


1 


2 


7 







Ik 


1953 


5 


1 


3 


9 


1 




19 


1954 


: 5 


1 


3 


9 


2 




20 


1955 


: 5 


1 


3 


8 


1 




18 



1/ Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. Also, see note l/, table 5. 



Ingredients 

Fats 

Answers for 1955 to the mail questionnaire indicated that more than half 
the producers used a particular type of vegetable fat in making their product 
(table 22). An additional 28 percent used a blend of vegetable fats, and 3 
percent used animal fats or a blend of animal and vegetable fats. 



There does not appear to be any strong preference according to size of 
plant for particular types of vegetable fats. However, a greater percentage 
of plants in the two smaller size groups reported they use a blend of vegetable 
fats. Only in the smallest plants and those of unknown size did any of the 
plants report the use of animal fats or a blend of animal and vegetable fats. 

An analysis by States of the fats used in mellorine production (table 23) 
shows that the largest producing State, Texas, reported a slight preference 
for a blend of vegetable fats over a particular type of vegetable fats. In 
Illinois, on the other hand, a particular type of vegetable fat was used by 
twice the number of manufacturers using all other types. Oklahoma responses 
showed most producers using a particular type of fat. In Missouri, there ap- 
peared to be a rather strong tendency to use the blends. In the "all other 
States" category, almost all the mellorine makers preferred a particular type 
of vegetable fat. 

Figures for I9A9-54 show no significant change, by plant size or by State, 
in the types of fats used. 



33 



Table 22. 



-Number of responding plants using various types of nonmilk fats l/ in mellorine manufacture, 
by size of plant 2/ 



Size category and year 



One specific 

type of 

vegetable 

fat 



Blend of 

vegetable 

fats 



Animal 
fat 



Blend of 

vegetable 

and animal 

fats 



No answer 



Less than 250,000 gallons: : 

I9I+9 : 2 2 

1950 : 3 2 2 1 

1951 : 7 2 1 3 

1952 : H 5 — 2 

1953 : 15 11 — 2 

195^ : IT 11 1 3 

1955 ..-•: 19 11 1 2 

250,000-500,000 gallons: : 

19^9 : 1 

1950 : 2 

1951 : 2 2 

1952 : 6 k 

1953 : 6 5 

195^ .-..: 8 5 

1955 : 8 6 

500,000-800,000 gallons: : 
19^9 : 

1950 : 

1951 : 1 1 

1952 : 7 2 

1953 : 9 3 

195^ .-: 9 3 

1955 : 9 3 

More than 800,000 gallons: : 

19^9 • : 1 

1950 : 1 1 

1951 : 3 1 

1952 : 10 5 

1953 : H 7 

195^ : 10 8 

1955 ....: 12 7 

Size unknown: : 

19^9 : 

1950 : 1 

1951 : 2 1 

1952 : 9 3 1 

1953 : 9 5 1 

195^ : 10 5 

1955 : 11 ^ 

All plants: : 

19^9 : h 2 

1950 : 7 3 2 1 

1951 : 15 7 1 3 

1952 : ^3 19 1 2 

1953 : 50 31 1 2 

195^ : 5^ 32 1 3 

1955 : 59 31 1 2 

TJ Some plants reported the use of more than one type of fat during the year. Consequently, 
columns added will sometimes exceed the number of plants responding. 
2/ Size based on 1955 production. 



31* 



Table 23. 



-Number of plants reporting use of various types of nonmilk fats l/ in mellorine 
manufacture, by States 



State and year 



One specific 

type of 

vegetable 

fat 



Blend of 

vegetable 

fats 



Animal 
fat 



Blend of 

vegetable 

and animal 

fats 



No 
answer 



Illinois : 

19^9 o 

1950 

1951 

1952 

1953 

195^ 

1955 , 

Missouri : 

19^9 ...= 

1950 

1951 

1952 

1953 

195^ , 

1955 

Oklahoma ; 

19^9 , 

1950 .0....0.. 

1951 

1952 

1953 , 

195^ 

1955 

Texas ; 

19^9 

1950 

1951 

1952 

1953 

195^ 

1955 

Other States 2/ : 

19^9 

1950 

1951 , 

1952 

1953 

195^ 

1955 



1 — 1 1 

— - 1 2 2 

— 1 1 1 

1 

12 — 1 

6 111 

12 1 — 1 

15 1 — 1 
16 



1/ Some plants reported the use of more than one type of fat during the year. Consequently, 
the columns added will sometimes exceed the number of plants responding. 

2/ Includes Alabama, Arkansas, California, Montana, Oregon, and South Carolina. Also, see 
footnote l/, table 5. 



- 35 - 

Besides differences in the kinds of fats used, there are differences in 
the amounts used. The proportion of fat is one of the factors differentiating 
the premium and the regular-grade product. Minimum fat content is one of the 
basic requirements in standards for dairy products in most States. 

Minimum fat content requirements for ice cream are regulated by the var- 
ious States. For the States covered in this study, the requirements range 
from a high of Ik percent in Nevada to a low of 8 percent in Texas. Alabama, 
Arkansas, California, Missouri, Montana, Oklahoma, Oregon, and South Carolina 
have minimums of 10 percent, while the minimum in Illinois is 12 percent 3/. 

Ice milk standards are not so clearly defined as are those for ice cream. 
Texas, Missouri, Illinois, and Nevada have no standards for ice milk. Alabama 
has a minimum of 2.5 percent fat; California's minimum is k percent. Oregon, 
South Carolina, and Montana set maximum as well as minimum fat content stand- 
ards on ice milk. 

Mellorine standards of fat content, as defined by the various States, are 
as follows: Minimum fat requirements for vegetable-fat frozen desserts in 
Alabama, Arkansas, California, Montana, and South Carolina are 10 percent. 
Illinois has a minimum of 8 percent, while Texas and Oklahoma each require 
that the product contain 6 percent fat. Oregon's minimum fat requirements 
are 3.2 percent, and Missouri and Nevada have no legal requirements. (See 
table 1, page 7.) Actual fat contents are reported in tables 2k and 25. 



Vitamins 

The vegetable fats used in making mellorine do not contain the vitamins 
that are present in butterfat. The model bill, in order to make the nutritive 
value of mellorine comparable to that of ice cream, sets forth a minimum addi- 
tion of 8, 1+00 U.S. P. units of vitamin A, with proportionate increases when the 
food fat content exceeds 10 percent., 

Four States, Alabama, Arkansas, South Carolina, and Louisiana, require 
that the vegetable- fat frozen desserts made within their boundaries be forti- 
fied with vitamin A. Since no pertinent data are available from Louisiana, 
the data are drawn only from the first three States in the list and the other 
States where mellorine is legal. Most producers reported that they do not 
fortify their product (table 26). 

No industry-wide pattern in the use or nonuse of vitamins appears when 
the responses are arranged according to plant size. In no category did the 
number of manufacturers using vitamins exceed those who did not. Only 18 per- 
cent of the respondents said they added vitamins to their product. Eleven 
percent did not answer the question. 



W 



International Association of Ice Cream Manufacturers, Digest of State 
Standards of Identity for Ice Cream and Related Products, p. 1. 



36 



Table 2k. — Number of responding plants reporting various percentages of fat 
content for frozen dessert products manufactured, by size of plant, 1955 



Size of plant 1/ 



Product and percent 
of fat content 



Under : 250,000- 
250,000 : 500,000 
gallons ; gallons 



500,000-: More than: 
800,000 : 800,000 : 
gallons ; gallons ; 



• Size 
'unknown 



All 
plants 



Ice cream 




(premium grade): 




8 to 12 percent 


3 


12 to l6 percent .... 


19 


l6 to 20 percent .... 


3 


20 percent or more . . 


1 


No answer . . . <> 


11 


Ice cream 




( regular grade ) : 




8 to 10 percent 


2 


10 to 12 percent .... 


11 


12 percent or more . . 


IT 


No answer 


7 


Mellorine 


(premium grade): 




8 to 12 percent 


IT 


12 to l6 percent .... 


k 


No answer 


±6 


Mellorine 




(regular grade): 




6 to 8 percent 


k 


8 to 10 percent 


k 


10 to 12 percent .... 




12 percent or more . . 


l 


No answer 


16 


Ice milk: 




1 to 3 percent 


k 


3 to 5 percent 


Ik 


5 to 7 percent 


6 


No answer 


13 



10 

5 



10 

6 



5 

1 
10 



1 

10 



3 

10 



5 

12 

1 

1 



10 



5 
Ik 



k 
1 

ll 



l 

15 
1 

2 



3 

kk 

29 

2 

21 



— 


2 


2 


39 


8 


k5 


k 


13 


6 


36 


— 


5 


8 


58 


k 


18 


2 


15 


k 


36 





3 


k 


27 




6 


3 


k9 


1 


9 


10 


35 



~±~7 Size based on 1955 production. 



37 



Table 25. — Number of responding plants reporting various percentages of fat 
content for frozen dessert products manufactured, by States, 1955 



Product and percent 
of fat content 



Illinois " Missouri ' Oklahoma 



Texas 



Other 
States 1/ 



Ice cream 

(premium grade ) : 
8 to 12 percent . . . 
12 to l6 percent . . 
l6 to 20 percent . . 
20 percent or more 
No answer 



Ice cream 

(regular grade): 
8 to 10 percent . . . 
10 to 12 percent . . 
12 percent or more 
No answer 



Mellorine 

(premium grade): 
8 to 12 percent , 
12 to l6 percent 
No answer , 



Mellorine 

( regular grade ) : 
6 to 8 percent 
8 to 10 percent . . , 
10 to 12 percent . , 
12 percent or more 
No answer , 



Ice milk: 

1 to 3 percent 
3 to 5 percent 
5 to 7 percent 
No answer 



15 
6 



3 

23 
3 



10 

l 
18 



2 

3 

Ik 

2 



3 

13 
k 
9 



10 
3 



11 
9 

2 

7 



l 
16 



10 
2 

18 



il 
7 
5 



3 
12 

15 



10 
3 
5 



TJ Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. See footnote l/, table 5. 



38 



Table 26. ■ 



•Fortification of mellorine with vitamins by responding plants, 
by size of plant 



Size of plant 1, 



Use 

vitamins 



Do not use 
vitamins 



No - 
answer 



Under 250,000 gallons 

250,000-500,000 gallons 

500,000-800,000 gallons 

More than 800,000 gallons , 

Size unknown 

Total 

l7 Size based on 1955 production, 



6 


27 


7 


3 


11 


2 


2 


10 


1 


k 


15 


— 


k 


10 


2 


9 


73 


12 



On a State basis, 7 percent of the respondents in Illinois said they used 
vitamins (table 27), 9 percent in Missouri, 7 percent in Oklahoma, and 10 per- 
cent in Texas. In the "all other States" category, 60 percent of the respond- 
ents reported they fortified their products with vitamins. Three of the seven 
States in this category require manufacturers to fortify their product. 



Table 27. — Fortification of mellorine with vitamins by responding plants, 

by States 



State 



Use 

vitamins 



Do not use 
vitamins 



No 
answer 



Illinois : 2 23 k 

Missouri : 1 9 1 

Oklahoma : 1 13 1 

Texas : 3 23 5 

Other States l/ : 12 7 1 

Total : 19 75 12 

l7 Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. See footnote l/, table 5. 



Manufacturing Problems and Cost 
Problems 



Even though production processes for mellorine and ice cream are basically 
the same, some mellorine producers have encountered production problems. Some 
of the problems are common to the frozen dessert industry as a whole, and 
others appear to be peculiar to the making of mellorine. 



- 39 - 

Almost half of the respondents said they had no production problems in 
manufacturing mellorine (table 28). Of the difficulties listed, the one most 
prominent was in flavoring the product. Twenty-one percent of all respondents 
reported they had had that trouble. This flavoring problem may have its basis 
in the fact that nonmilk fat products require more flavoring than do the 
butterfat products if they are to be comparable with the high-fat ice creams. 
One writer states "... the manufacturer who utilizes high-quality cream in 
his ice cream and flavors with a straight vanilla probably will use more fla- 
voring in his vegetable fat product in order to give flavor to the bland 
fat." kl 



Table 28. --Number of responding plants reporting production problems in 
manufacture of mellorine, by size of plant 



Type of problem l/ 



Size of plant 2/ 



Under : 250,000-: 
250,000 : 500,000 : 
gallons ; gallons : 



500,000-: More than: 
800,000 : 800,000 : 
gallons : gallons : 



Size 

unknown 



Total 



Failure of mix to wash 
clean in mixing vats 
and freezers 

Difficulty in obtain- 
ing desired overrun. . 

Difficulty in stabiliz- 
ing and emulsifying.. 

Nonuniformity of the 
fat 

Shrinkage in package . . 

Difficulty in flavor- 
ing 

Other 

No problems 

No answer 



k 
k 

6 

5 
7 

13 

2 

19 



2 

1 

1 

2 
1 

3 

1 
10 



16 



13 

Ik 

12 
18 



22 

6 

51 
1 



IT The table is based on replies for 104 plants, some of which reported 
more than one type of problem. 

2/ Size based on 1955 production. 

Shrinkage in the package was the next most common problem of the produc- 
ers. This is not a new problem to frozen dessert manufacturers. An authority 
on ice cream making has the following to say about this difficulty: "The 
shrinkage of ice cream is a defect that has become increasingly more trouble- 
some. The ice cream shrinks away from the sides and top of the package; in 



hj Thorn, Edward , 
Cream Review, Vol. 36, 



"What About Vegetable-Fat Frozen Desserts?" 
No. 2, September 1952, p. 66. 



The Ice 



- 1*0 - 

5-gallon bulk cans, the level may drop as much as two or three inches. Trouble 
with the defect commonly extends to the entire output over a period of time." 5y| 

i 
Since shrinkage is due primarily to the air in the product and the subse- 
quent loss of this air, it is believed that the difference in the type of fat 
used in the frozen dessert would have no appreciable effect on the amount of ' 
shrinkage. Thus, shrinkage in mellorine does not appear to be a greater prob- 
lem than shrinkage in ice cream. 

Mellorine producers reported that they have a production problem involving 
failure of the mix to wash clean in the vats. Fifteen percent of the respond- 
ents listed this as a problem. The vegetable-fat globules have a tendency to 
adhere to the walls of the mixing vats more readily than do butterfat globules. 

Obtaining the desired overrun, like shrinkage, is not a problem peculiar 
to the mellorine field, but seems to be prevalent throughout the frozen dessert 
industry. There appear to be varying opinions as to whether or not the fat 
content affects the overrun of a particular mix. It cannot be assumed, how- 
ever, that vegetable or animal fats, or blends of these two fats, produce more 
problems than does butterfat. The problem is present throughout the industry 
and does not seem to be greater for mellorine than for any other frozen dessert, 

Other problems were reported by the respondents. Of less importance were 
difficulties in stabilizing and emulsifying and in the nonuniformity of the 
fat, and the problems involving a longer mixing time and a lower freezing point, 

Arrangement of the data by plant size shows that the smallest producers, 
those of class I, had the greatest number of problems. Forty percent of all 
problems reported by respondents came from this group. These problems do not 
appear to be altogether contingent on the size of the plant, however, because 
23 percent of all reported problems were in plants in the highest production 
group . 

The problems reported by the respondents can be divided into two broad 
groups: Those inherent in the frozen dessert industry, and those peculiar to 
the utilization of vegetable or animal fats in place of butterfat. Since many 
of the respondents stated that they had encountered no problems, the troubles 
may arise from inexperience or the inability to utilize experience. Experi- 
mentation with various fats and the utilization of new types or blends of fats 
may alleviate some of the problems that arise from the use of fats other than 
butterfat . 

By States, the data show that 28 percent of the total problems reported 
were in Texas, and 2k percent in Illinois (table 29). There were l6 percent 
in Missouri, lk percent in Oklahoma, and the remaining 18 percent in the "all 
other States" category. 

27 Sommer, Hugo H., Theory and Practice of Ice Cream Making , p. 401. 



kl 



Table 29. --Number of responding plants reporting production problems in 
manufacture of mellorine, by States 

Type of problem 1/ Illinois : Missouri Oklahoma : Texas "* ^ er : Total 
: : : : : States 2/: 



Failure of mix to wash : 

clean in mixing vats 

and freezers : k 2 2 6 2 l6 

Difficulty in obtaining : 

desired overrun : k 3 2 1+ 13 

Difficulty in stabiliz- : 

ing and emulsifying . . . : 2 3 3 k 2 Ik 

Nonuniformity of the : 

fat : 1 2 2 h 3 12 

Shrinkage in package . . . . : 2 3 2 7 k 18 

Difficulty in flavoring..: 7 3 5^3 22 

Other : h --- --- 2 -— 6 

No problems : Ik h 7 17 9 51 

No answer : 1 1 



TJ The table is based on replies for 10 it- plants, some of which reported 
more than one type of problem. 

2/ Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. See footnote l/, table 5. 



Costs 

The price differential between butterfat and vegetable fat is one of the 
basic reasons for cost differences, and presumably price differences, when 
mellorine and ice cream are compared. The fat cost, however, is not the only 
consideration in the overall cost of making the product. 

According to the returns from the questionnaire, 92 percent of the re- 
spondents said the cost of the fat used in mellorine lowered the price of the 
product below that of ice cream (table 30). Four percent of the respondents 
said that the fat cost was the same for the two products while an additional 
k percent stated that the fat cost was higher for mellorine than for ice cream. 
The reasons for the high-cost reports cannot be determined from the available 
data. 

None of the other cost factors was reported with the degree of unanimity 
registered for fat. For instance, one of the factors reported on was the cost 
of storage for raw ingredients going into the principal types of frozen desserts. 
Of the respondents answering this phase of the question, slightly over half 
(51 percent) indicated that storage costs for mellorine ingredients were lower 
than those for ice cream. Slightly less than half, or J+7 percent, stated that 
storage costs were the same for the two products, and 2 percent said storage 



h2 - 



Table 30. --Factors of mellorine production causing cost variations relative to ice cream production, 

responding plants, by size of plant 1/ 

Factor and size of plant Higher ; Same • Lower \ 



Less than 250,000 gallons: 

Cost of fat 

Storage of raw ingredients . 

Invisible loss 

Milk solids-not-fat 

Emulsifiers and stabilizers 

Production problems 

Distribution 

Other 

250,000-500,000 gallons: 

Cost of fat 

Storage of raw ingredients . 

Invisible loss 

Milk solids -not- fat 

Emulsifiers and stabilizers 

Production problems 

Distribution 

Other 

500,000-800,000 gallons: 

Cost of fat 

Storage of raw ingredients . 

Invisible loss 

Milk solids-not-fat 

Emulsifiers and stabilizers 

Production problems 

Distribution 

Other 

More than 800,000 gallons: 

Cost of fat 

Storage of raw ingredients . 

Invisible loss 

Milk solids-not-fat 

Emulsifiers and stabilizers 

Production problems 

Distribution 

Other 

Size unknown: 

Cost of fat 

Storage of raw ingredients . 

Invisible loss 

Milk solids-not-fat 

Emulsifiers and stabilizers 

Production problems 

Distribution 

Other 

All plants: 

Cost of fat 

Storage of raw ingredients . 

Invisible loss 

Milk solids-not-fat 

Emulsifiers and stabilizers 

Production problems 

Distribution 

Other 



1/ Size based on 1955 production. 



- i+3 - 

costs were higher for the ingredients of mellorine than for the ingredients of 
ice cream. Since the fat used is the basic difference in ingredients between 
mellorine and ice cream, the basic difference in costs should be in the cost 
of storing the fat. According to E. M. Deck, "Hydrogenated vegetable fats can 
be stored at room temperature for several months; there is no need to store 
under refrigeration." 6/ If mellorine makers do not refrigerate their fats, 
or if they refrigerate the fats in the same storage facilities used for butter- 
fat, storage costs would be lower or the same as those for ice cream ingred- 
ients. It is difficult, however, to see how storage costs could be higher for 
the raw ingredients of mellorine than for those of ice cream, unless addition- 
al storage facilities or other investments were needed to handle mellorine in- 
gredients in addition to those already existing for other products. 

The cost factors involved in invisible losses, i. e., by evaporation, 
shrinkage, and the like, appear to be similar to those involved in the manu- 
facture of ice cream. Of the respondents answering questions on this subject, 
78 percent indicated that the costs of invisible loss were the same in mello- 
rine manufacture as they were in making ice cream. Nineteen percent stated 
that the costs of invisible loss were lower for mellorine, while 3 percent 
said they were higher. 

Of the respondents, 7^ percent considered that the cost of milk solids- 
not-fat (also called serum solids) was the same for both mellorine and ice 
cream. Twenty-two percent stated that the cost was higher for the solids in 
mellorine, and the remaining k percent stated that the cost of solids-not-fat 
was less for mellorine than for ice cream. 

The amount of milk solids- not- fat used in the mix is based on the fat 
content of the mix. Generally, as the fat content rises, the amount of milk 
solids-not-fat declines. Conversely, when the fat content in a mixture is 
lowered, the tendency is to add more solids-not-fat. According to Dr. Sommer: 

A simple rule for figuring the maximum serum solids content is 
as follows: From 100 subtract the sum of the percentages of fat, 
sugar, gelatin, egg solids, and any other solids (except serum 
solids) which you propose to use; then divide the difference by the 
factor 6.9; the quotient will be the highest serum solids content 
that can be used safely as far as sandiness is concerned. 7/ 

It can be seen, therefore, that if all of the components of the mixture are 
held constant except for the fat and milk solids -not -fat, these two components 
will tend to fluctuate inversely to each other. 

Since fat content is sometimes lower in mellorine than in ice cream, it 
follows that milk solids-not-fat content may be higher in some cases. This 



~bj E. M. Deck, "Working with Vegetable Oils," Ice Cream Field , Vol. 60, 
No. 67 December 1952, p. 62. 

7/ Sommer, op. cit ., p. 21. 



- kk - 

fact could account for the relatively high percentage of respondents reporting 
a higher cost factor for milk solids-not-fat in mellorine than in ice cream. 
The relatively low fat content and the correspondingly high nonfat content of 
mellorine suggests also that the protein content of the product may be more 
stable than that of ice cream, and possibly higher 8/. If so, that factor, 
might affect consumers' tastes and preferences, and producers' marketing and 
promotional practices. 

Emulsifiers and stabilizers cost about the same in mellorine as in ice 
cream, according to 69 percent of the answers . Twenty- three percent of the 
respondents answering this question said costs for emulsifiers and stabilizers 
were higher for mellorine, and the remaining 8 percent said the costs were 
lower for mellorine than for ice cream. There appears to be no basis for an 
assumption that either more or costlier stabilizers and emulsifiers are re- 
quired for nonmilk-fat frozen desserts. The reason or reasons for the report- 
ed high costs cannot be ascertained from available data. 

Since production processes for mellorine and ice cream are fundamentally 
the same, it would be expected that production costs would be approximately 
the same. Seventy- five percent of the plants answering the question gave the 
expected report. Eighteen percent indicated higher production costs for mel- 
lorine, and the remaining 7 percent indicated that production costs for mello- 
rine were lower than those for ice cream. Production problems in making mello- 
rine have already been discussed. 

Distribution costs for ice cream and mellorine were reported to be the 
same by 82 percent of the respondents. Eleven percent stated costs were 
higher for mellorine, and 7 percent indicated that their experiences showed a 
lower distribution cost for mellorine than for ice cream. Two items, the cost 
of fat and the storage of raw ingredients, make for lower cost for mellorine, 
according to most reports. Most respondents indicated that other cost factors 
for the two products were the same. 

Neither the data by plant sizes nor the data by States indicate any rad- 
ical departures from the total data examined. State data are shown in table 
31 for purposes of comparison. 



MARKETING 

This section is devoted to mellorine sales, market outlets, packaging, 
advertising and promotion, and profit margins. A few of the implications from 
marketing findings also are discussed. 

B7 Turnbow, Grover Dean; Tracy, Paul Hubert; and Raffetto, Lloyd Andres, 
The Ice Cream Industry , p. J+36 . 



-ii5 



Table 31. — Factors of mellorine production causing cost variations relative to ice cream 
production, reported by responding plants, by States 



Factor and State of location 



Higher 



Illinois : 

Cost of fat 

Storage of raw ingredients . . 

Invisible loss 

Milk solids-not-fat 

Emulsifiers and stabilizers . 

Production problems 

Distribution 

Other 

Missouri: 

Cost of fat 

Storage of raw ingredients . . 

Invisible loss 

Milk solids-not-fat 

Emulsifiers and stabilizers . 

Production problems 

Distribution 

Other 

Oklahoma : 

Cost of fat 

Storage of raw ingredients . . 

Invisible loss 

Milk solids-not-fat 

Emulisifiers and stabilizers 

Production problems 

Distribution 

Other 

Texas : 

Cost of fat 

Storage of raw ingredients . , 

Invisible loss , 

Milk solids-not-fat 

Emulsifiers and stabilizers , 

Production problems 

Distribution 

Other , 

Other States l/: 

Cost of fat 

Storage of raw ingredients . , 

Invisible loss 

Milk solids-not-fat , 

Emulsifiers and stabilizers , 

Production problems , 

Distribution 

Other . . . . , 



1/ Includes 
I// table 5 • 



Alabama, Arkansas, California, Montana, Oregon, and South Carolina. See footnote 



46 - 



Sales 

Manufacturers of mellorine vere asked, to indicate whether their sales of 
mellorine, ice cream, ice milk, and sherbets had increased, decreased, or re- 
mained stable during the years from 1949 through 1955 • Perhaps the best com- 
parison of sales trends can be seen by taking each product and tracing its 
growth or decline through the years as reported by the responding plants who 
answered this particular question (table 32). 



Table 32. — Number of responding plants reporting increases, decreases or 
stability in sales of their frozen dessert products, 1949-1955 



Change 


19^9 


1950 


1951 


: 1952 


1953 


; 1954 


1955 


Mellorine : 
















Increase . . . 


3 


6 


19 


46 


6l 


59 


46 


Decrease . . . 





— 


1 


1 


11 


19 


35 


Stable 


1 


2 


1 


3 


5 


10 


8 


No answer . . 


k 


7 


6 


23 


13 


12 


10 


Ice cream: 
















Increase . . . 


4 


2 


12 


21 


29 


37 


55 


Decrease . . . 


3 


4 


6 


18 


35 


36 


23 


Stable 


— 





l 


7 


7 


7 


5 


No answer . . 


1 


9 


8 


27 


19 


19 


16 


Ice milk: 
















Increase . . . 


— 


— 


2 


19 


27 


31 


36 


Decrease ... 


— 


— 


1 


1 


9 


16 


14 


Stable 


1 


2 


4 


8 


10 


12 


13 


No answer . . 


7 


13 


20 


^5 


44 


41 


36 


Sherbets : 
















Increase . . . 


l 


1 


8 


22 


39 


47 


53 


Decrease . . . 


2 


2 


2 


6 


10 


14 


7 


Stable 


1 


3 


6 


15 


11 


12 


17 


No answer . . 


k 


9 


n 


30 


30 


27 


22 


All products : 
















Increase . . . 


3 


5 


i4 


38 


to 


h6 


50 


Decrease . . . 


— 


— 


3 


4 


17 


19 


16 


Stable 


— 


— 


— 


1 


3 


3 


4 


No answer . . 


5 


10 


10 


30 


30 


32 


29 



- hi - 

Three of the four reporting plants stated that their mellorine sales had 
increased in 19^9 over the previous year. The remaining plant stated that its 
sales remained stable, and no plants reported a decrease in mellorine sales. 

In 1950 the percentages remained exactly the same as for 19^9, but in 
1951, 19 of the 21 plants answering the question stated that their sales had 
increased over the 1950 level. One said that sales had remained stable, and 
one that sales had declined. 

The proportion of plants indicating an increase in mellorine sales over 
the previous year rose slightly in 1952, with 92 percent of the respondents 
experiencing increases. Decreases were reported by 2 percent, and the remain- 
ing 6 percent said there was no change in their sales from 1951 to 1952. 

The proportion of the plants indicating decreases in mellorine sales from 
the previous year rose quite sharply in 1953. In this year, lk percent of the 
plants that answered the question stated that 1953 sales were below 1952. 
Plants reporting increases accounted for 79 percent, and 7 percent indicated 
that their sales in 1952 and 1953 were approximately the same. 

In 195^ there was another rise in the percentage of plants whose sales 
declined. Twenty-two percent of the respondents said their sales of mellorine 
were less in 195^ than in 1953 • Sixty-six percent said their mellorine sales 
had increased, and 12 percent said sales had remained stable. 

In the last year of this analysis, 1955 > only slightly over half of the 
respondents answering the question (52 percent) stated that their mellorine 
sales had increased over 195^-* Thirty-nine percent experienced decline in 
sales during the year, and the remaining 9 percent reported stability in sales 
from 195^ to 1955. 

These sales data showing increases, decreases, or stability tend to sub- 
stantiate previous statements about the product. They explain how the industry 
must have appeared so lucrative about 1951 an -l 1952 to those frozen dessert 
manufacturers not making the product and why there was an influx of new makers 
of mellorine. Moreover, the decline in the proportion showing an increase of 
sales in the following years might well be the result of the entrance of addi- 
tional firms into the industry. Also, the reasons for beginning manufacture 
given by so many of the respondents- -to meet competition and to increase their 
market- -appear to be confirmed. 

Some discussion of the data on ice cream, ice milk, or sherbet, presented 
in table 32 may be useful. 

The percentages of respondents reporting increases in sales of ice cream 
fluctuated widely during these years, from a low of 33 percent in 1950 to 66 
percent in 1955. There was a close relationship between these fluctuations 
and the national data on ice cream production. For instance, 1950 national 
output fell below 19^9, and the percentage of manufacturers showing increases 



- kQ - 

was lov. The opposite was true in 1955 > when ice cream production showed a 
5.5 percent increase from 195^ • 

In all of the years for which data were available from the respondents in 
meaningful quantities, the answers showed more than half of the plants with 
increased sales of ice milk over the previous year except, perhaps, for 1951. 
Data on ice milk:, too, tend to conform to national production patterns. Not 
enough respondents answered the sherbet question to support valid conclusions. 



Market Outlets 

The primary market outlets for mellorine in the States where mellorine is 
sold are supermarkets and other grocery stores. Questionnaire returns indi- 
cated that in 1952 these outlets accounted for almost 77 percent of the sales 
of mellorine to consumers. In 1953 > the percentage rose to over 8l; in 195^-> 
to 82 percent; and in 1955; to more than 83 percent (table 33 > fig* 3)» 

Since these two types of outlets account for so much of the total mello- 
rine movement, it is not difficult to see why most of the mellorine is pack- 
aged in half- gallon and smaller containers. Supermarkets and other grocery 
stores are seldom equipped to dispense mellorine in bulk. The output of mel- 
lorine through drug stores and confectioneries has declined through the years, 
and it is through these two types of outlets that one would expect most bulk 
mellorine to be moved. Thus, the trend has been away from bulk sales of mel- 
lorine, and toward more sales in family-size packages. 

Movement of mellorine products through restaurants and hotels has re- 
mained fairly constant during the last few years. However, sale of mellorine 
by company-owned stores has increased from l.k percent of the total output in 
1952 to k.O percent in 1955- 

In the "all other outlet" group, which included retail delivery to homes, 
institutions, military establishments, vending machines, street carts, and the 
like, the proportion of sales has remained relatively constant at slightly over 
2 percent of total sales. 

Grocery stores other than supermarkets have been distributing a fairly 
constant proportion of the mellorine production within the 12 States. These 
stores accounted for 33 percent of the output in 1952, 35 percent in 1953 > 
32 percent in 195^> and 31 percent in 1955. Supermarkets, on the other hand, 
have increased their proportion of the total output from \h percent in 1952 to 
52 percent in 1955* Since the gain in supermarket operations has not been at 
the expense of the other grocery stores, it follows that some other type or 
types of outlets have declined in importance. The drugstore and confection- 
ery groups have shown the declines that could account for the increase in 
supermarket sales. 

An interesting pattern is revealed when the types of outlets for distrib- 
uting mellorine are considered by plant size. The smallest plants (production 



- L9 - 

Table 33. — Percentage distribution of mellorine marketed by responding plants through 
various types of outlets, by size of plant, 1952-1955 



Year and type of outlet 



Under 
250,000 
gallons 



Size of plant 1/ 



250,000-: 500,000- 
500,000 : 800,000 
gallons : gallons 



More than: 
800,000 : 
gallons : 



All 
plants 



Percent Percent Percent Percent Percent 



1952: 

Supermarkets 0.0 

Grocery stores (not supermarkets), 

Drugstores » 

Restaurants , hotels . . . . . , 

Confectioneries 1 

Company-owned stores , 

Other 2/ 



1953: 

Supermarkets 

Grocery stores (not supermarkets) 

Drugstores « 

Restaurants , hotels . . 

Confectioneries 

Company-owned stores . . 

Other 2/ 



1954: 

Supermarkets 

Grocery stores (not supermarkets).. 

Drugstores 

Restaurants, hotels 

Confectioneries 

Company-owned stores 

Other 2/ 



1955: 

Supermarkets 

Grocery stores (not supermarkets ) . . 

Drugstores 

Restaurants , hotels 

Confectioneries 

Company-owned stores 

Other 2/ 



17. 7 


48.1 


47.5 


51.0 


44.0 


60.0 


27.7 


30.9 


25.5 


32.8 


14.1 


2.0 


8.6 


14.5 


13.4 


2.5 


.2 


— 


1.8 


1.7 


.4 


.2 


1.3 


6.1 


4.4 


3.4 


2.0 


— 


.9 


1.4 


1.9 


19.8 


12.2 


.2 


2.3 


21.7 


45.7 


37.4 


54.7 


45.9 


62.5 


32.7 


52.5 


24.1 


35.2 


8.6 


8.5 


6.3 


9.8 


9.0 


3-1 


1.0 





1.0 


1.2 


.2 


.4 


1.0 


5.3 


3.4 


2.4 


3.8 





3.8 


3.1 


1.5 


7-9 


2.8 


1.3 


2.2 


23.1 


48.7 


60.4 


53.6 


49.8 


56«5 


34.8 


33-1 


24.6 


32.3 


10.2 


5.1 


4.3 


9.0 


7-8 


3.2 


.9 





1-3 


1.3 


.2 


.5 


1.0 


3-5 


2.2 


5-3 


3-7 





5-4 


4.1 


1.4 


6.3 


1.2 


2.6 


2.4 


27.3 


49.0 


60.2 


56.2 


52.1 


54.5 


30.1 


35.1 


24.4 


31.4 


7.6 


8.5 


3.1 


8.3 


7.2 


3.0 


2.6 





1.2 


1.4 


.2 


1.2 


•9 


2.1 


1-5 


5.6 


2.6 





5.4 


4.0 


1.8 


6.0 


• 7 


2.4 


2.4 



Tf Size based on 1955 production . 

2/ Includes retail delivery to homes, institutions, 
ing machines, street carts or trucks, etc. 



military establishments, vend- 



So - 



MELLORINE MARKETED BY 
TYPE OF OUTLET 

Percentage Distribution, 1952-55 



80 



60 



40 



20 



. ■ . ■ jj .** 



vm& 




1952 



1953 



1954 



1955 



| Supermarkets ^g Grocery stores (not supermarkets ) 
Drugstores V////X Confectionery RKj Restaurants, hotels 
Company-owned stores 1 j Other 



S. DEPARTMENT OF AGRICULTURE 



£G. 4254-57(5) AGRICULTURAL MARKETING SERVICE 



Figure 3 



- 51 - 

of 250,000 gallons or less in 1955) showed a definite dependence on the grocery- 
store outlet. In 1952; 60 percent of the production of these small plants was 
distributed through grocery stores other than supermarkets, while 18 percent 
was marketed through supermarkets. In 1953, in the same plant-size group, 
62.5 percent was marketed through other grocery stores while 22 percent was 
sold through supermarkets. In 1954 the percentages were 57 marketed through 
other grocery stores and 23 through supermarkets, and in 1955 they were 54.5 
through other grocery stores and 27 through supermarkets. 

The smallest plants were the only ones indicating they sold most of their 
mellorine through grocery stores other than supermarkets. In all other size 
groups, supermarkets were the principal outlets. 

This tendency of the smaller plants to sell through grocery stores other 
than supermarkets poses some questions to which no answers are now available. 
It is possible that the smaller plants are mostly in communities where super- 
markets are not available. It is also possible that supermarkets prefer to 
get all their supply from one plant, and this volume of output might not be 
supplied by a small producer. The dependence of small producers on grocery 
stores other than supermarkets also raises some questions about marketing 
costs and the relation between producer and retailer margins. 

A classification by States generally follows the overall pattern, showing 
a concentration of sales through the supermarkets (table 34). In Illinois in 
1952, more mellorine was moved through other grocery stores than supermarkets. 
In the next three years, however, the pattern was reversed, and supermarkets 
handled a greater share of the output than other grocery stores. Drugstores 
showed a definite decline during the 4-year period, as did the confectionery 
stores. Restaurants and hotels and company-owned stores sold a relatively 
stable percentage of the output. 

In Missouri, the percentage of output through other grocery stores ex- 
ceeded the output through supermarkets in 1952 and 1953* The shift to market- 
ing mellorine through supermarkets came in 195^ a nd continued through 1955* 
As in Illinois, Missouri sales through drugstores declined during the 4-year 
period, as did sales through confectioneries and company-owned stores. 

Oklahoma respondents, like those in Missouri, favored grocery-store out- 
lets over supermarkets in 1952 and 1953, and supermarkets over grocery stores 
in 1954 and 1955. Sales through drugstores declined each year during the k- 
year period. Although sales through confectioneries were declining steadily 
in all other States, sales through this type of outlet in Oklahoma actually 
increased , from 1952 through 1954, and there was only a slight decline in 1955 • 
Sales through restaurants and hotels, company-owned stores, and retail delivery 
to homes declined over the 4-year period. 

Texas did not follow the pattern of the other States where mellorine is 
sold. In 1952, almost 54 percent of the mellorine produced in the State was 
marketed through supermarkets. The volume distributed through supermarkets 
declined to 50 percent of the total in 1953, dipped to 48 percent in 1954, and 



- 52 - 

Table 34. — Percentage distribution of mellorine marketed by responding plants through 
various types of outlets, by States, 1952-1955 



Year and type of outlet 



Illinois •Missouri "Oklahoma - Texas 



: 8 other 
; States l/ 



: Percent 
1952: : 

Supermarkets „ : 40 <> 7 

Grocery stores (not supermarkets)..: 44.3 

Drugstores 0.00 : 8.4 

Restaurants , hotels <> : 

Confectioneries : 6.4 

Company-owned stores : .1 

Other 2/ ....<, : .1 

1953: : 

Supermarkets . . . o „ . . . : 51-9 

Grocery stores (not supermarkets)..: 36.3 

Drugstores : 7*1 

Restaurants , hotels : .1 

Confectioneries .<,.... » : 4.5 

Company-owned stores ■> : .1 

Other 2/ : .0 

1954: : 

Supermarkets : 53*8 

Grocery stores (not supermarkets)..: 37=6 

Drugstores » : 5 • 7 

Restaurants , hotels : .1 

Confectioneries : 2.6 

Company-owned stores : .1 

Other 2/ : .1 

1955: : 

Supermarkets : 55*8 

Grocery stores (not supermarkets)..: 35*1 

Drugstores : 6.0 

Restaurants , hotels : .1 

Confectioneries ....<, „...: 2.6 

Company-owned stores : .2 

Other 2/ • ,........: .2 



Percent Percent Percent Percent 



34.4 


24.1 


53o7 




34.7 


40.0 


23.5 





11.8 


24.4 


14.8 





— 


1.5 


3.4 





15.3 


1.4 


— 





3.8 


5.6 


1-7 





— 


3.0 


2.9 





34.6 


34.7 


50.0 


21.9 


43.5 


36.1 


28.4 


71.7 


8.5 


17.8 


9.8 


• 3 


— 


l.l 


2.2 


5.8 


11.3 


1.9 


.2 


• 3 


2.1 


4.9 


6.0 








3.5 


3.4 





44.0 


40.3 


48.0 


65.7 


37.6 


33.8 


29.1 


27.9 


7.3 


14.3 


9.6 


.1 


— 


1.1 


2.2 


1.4 


9.4 


2.9 


.2 


.1 


1.7 


2.9 


7.1 


4.8 


— 


4.7 


2.0 


— 


55.6 


45.3 


49.4 


58.2 


34.3 


31.8 


28.2 


33.0 


5.8 


11.1 


9.0 


1.1 


— 


1.3 


2.4 


1.7 


3.7 


2.6 


.1 


.4 


.6 


2.3 


7.2 


5.6 


— 


5.6 


3.7 


— 



TJ Includes Alabama, Arkansas, California, Montana, Oregon, and South Carolina. 
See footnote l/, table 5. 

2/ Includes retail delivery to homes, institutions, military establishments, vend- 
ing machines, street carts or trucks, etc. 



- 53 - 

rose to k-9 percent in 1955. Sales in other grocery stores, on the other hand, 
which had been either holding their own or declining in other States, increas- 
ed from 1952 to 195*4- in Texas, and then declined slightly in 1955. The pro- 
portion of sales through drugstore, restaurant, and hotel outlets declined. 
Sales through confectioneries maintained a relatively constant but small per- 
centage of output while, in contrast, sales through company-owned stores in- 
creased during the 4-year period. 

In the "all other States" group, grocery stores other than supermarkets 
accounted for almost 72 percent of the mellorine marketed in these States in 
1953. Supermarkets accounted for 22 percent, and restaurants and hotels for 
over 5 percent. In 195^, supermarkets replaced other grocery stores as the 
largest outlet for mellorine, while all other types of outlets, except company- 
owned stores, declined in the proportion of total mellorine sold. In 1955 > all 
types of outlets except supermarkets increased their proportion of total dis- 
tribution in these States. Supermarkets dropped 7 percentage points from the 
previous year. However, they continued to have the greatest share of the 
market . 

The greatest portion of unfrozen mellorine mix sold to other users for 
freezing has, without exception, gone to drive-in stands in each of the k 
years from 1952 through 1955 (table 35). In 1952, drive-in stands froze 86 
percent of this mellorine mix. In 1953 > "the percentage rose to 88. The re- 
spondents who answered this question said they sold 87 percent to drive-in 
stands in 1954, and 84 percent in 1955* 



Table 35. — Percentage distribution, by type of outlet, for mellorine mix 
manufactured by responding plants for sale to others for freezing, 
1952-1955 



Outlet 


1952 


1953 


1954 


1955 




Percent 

86.1 

.0 

.0 
2.5 
3.2 
3.3 

4.9 


Percent 

87.O 

.0 

.2 

.8 
3.5 
4.2 
3.h 


Percent 

86.6 

.1 

.1 

• 5 
3.5 
4.6 
4.6 


Percent 
84.1 




.1 


Restaurants and hotels . . . 


.0 
.5 




3.6 


Military establishments . . 
Other 


4.6 
7-1 







Confectioneries provided an outlet for 2.5 percent of the mellorine mix 
in 1952, but this outlet declined in importance through the years, and in 1955. 
confectioneries consumed only 0.5 percent. Institutions have received in ex- 
cess of 3 percent of the mix in each of the years. 



- 5^ - 

Use of mellorine mix by military establishments in these States has grown 
slightly during the last few years, but still constitutes an outlet for less 
than 5 percent of the total. 

Drugstores and restaurants received an extremely small amount of the mel- 
lorine mix for sale. In none of the years under consideration did these two 
outlets combined attain 0.5 percent of the total mix sold. 

The questionnaires revealed one fact not evident from the tabulations. 
In organizations having several plants, there appears to be a tendency for one 
plant in the chain to make all the mix, and it is then distributed to the other 
plants for freezing. This supports the statement that specialization may be 
evolving in the industry. However, more evidence would be necessary to draw a 
positive conclusion. 



Container Sizes 

There are decided differences between mellorine and ice cream in the con- 
tainer sizes in which the two products are marketed. Figure h illustrates the 
volume of production packaged in the various sizes of containers in 1955 for 
both mellorine and ice cream. 

Most of the mellorine production is packaged in half-gallons, with only a 
small portion sold in bulk quantities (larger than gallons). Ice cream pro- 
duction, on the other hand, is divided almost evenly between bulk and half- 
gallons and gallons, with smaller percentages of total production going into 
the various other package sizes and types. 

The pattern of mellorine output by container sizes shows some interesting 
changes between 1951 and 1955 (table 36, fig. 5). In 1955, the half-gallon 
and gallon category made up 59*1 percent of total output. In 1951; however, 
this same category accounted for only 25. 1 percent of the total. In 1951, the 
greatest proportion (38- 5 percent) was in larger- than- gallon packages or bulk 
production. In 1955, the percentage sold in bulk had declined to 6. "J. 

In the other container- size categories, pints increased from "J. 6 percent 
of the total in 1951 to 8.0 percent in 1955* Quart packaging also increased 
during the period, from 15.^ percent of the total in 1951 to 18.1 percent in 
1955. Novelties and cups fell from 13A percent in 1951 to 8.1 in 1955. 

The trend away from the larger-than-gallon packaging to the half-gallon 
and smaller container sizes probably is largely due to the change in the type 
of outlet used in marketing mellorine. 

Data by plant size do not indicate any appreciable deviation from this 
container- size pattern. 

In considering container sizes by States, It should be recalled that 
several States have statutes that affect the packaging of mellorine. For 



- 55 - 



UJ ^ 

Z "i 



*l 



z o 

< UJ 
O-tt 

O "J 



< 

LU 

u 

LU 
U 




O 




o 

Ui 

« 

UJ UJ 



is 



56 - 



Table 36. — Percentage distribution of container sizes used to package 
mellorine manufactured by responding plants , by size of plant, 
1951-55 



Size of plant 1/ 
and year 


: Pints 


: Quarts 


; Half- 

[ gallons 


: Gallons 


:Larger 
: than 

: gallons 


: Novelties: 


Cups 




: Pet. 


Pet. 


Pet. 


Pet. 


Pet. 


Pet. 


Pet. 


Less than 250,000 
















gallons : 
















1951 


': 16.6 


2.7 


26.9 


0.2 


32.9 


18.1 


2.6 


1952 


: 10.1 


37.3 


20.7 


3-7 


15.1 


11.2 


1.9 


1953 


: 4.6 


27.9 


38.9 


1-7 


15.8 


7.9 


3-2 


1954 


: 4.9 


22.2 


49.2 


.7 


12.3 


7.8 


2.9 


1955 


: 5.8 


18.0 


57.9 


.3 


8.6 


7.0 


2.4 


250,000-500,000 
















gallons: 
















1951 


: 11.0 


7.1 


81.9 


— 


— 








1952 


: 12.3 


2.4 


49.7 


— 


2.5 


14.4 


18.7 


1953 


: 15.3 


7.3 


52.2 


2.6 


10.1 


5-1 


T.4 


1954 0.. 


: 9.4 


15.4 


59.2 


1.7 


7.8 


.9 


5.6 


1955 


: 8.2 


6.9 


69.7 


1.4 


8.0 


.8 


5.0 


500,000-800,000 
















gallons : 
















1951 


: 3.5 


86.7 


6.3 


— 


3.2 


— 


.3 


1952 


: 18.4 


49.6 


27.7 


___ 


2.9 


• 7 


.7 


1953 


: 3.6 


39.6 


51.3 


— 


1.2 


.9 


3.4 


1954 


: 7.9 


14.5 


73.1 


— 


1.0 


1.4 


2.1 


1955 


: 4.6 


14.0 


77.0 


— 


• 9 


1.6 


1-9 


More than 800,000 
















gallons : 
















1951 


: 


6.8 


27.0 


— 


55.6 


10.6 





1952 


: 30.5 


19.2 


19.6 


— 


19.4 


10.8 


• 5 


1953 


: 20.8 


19.3 


36.1 


— 


11.2 


9.2 


3.4 


1954 


: 14.0 


18.5 


44.6 


— 


10.8 


7-9 


4.2 


1955 


: 9.5 


21.7 


51.5 


--- 


7.8 


5.5 


4.0 


All plants : 
















1951 


; 7.6 


15.4 


25.1 


.0 


38.5 


12.3 


1.1 


1952 


: 24.8 


25.7 


21.2 


.9 


16.1 


9.8 


1.5 


1953 


: 15.6 


22.0 


39.5 


• 5 


10.9 


7.8 


3.7 


1954 


: 10.9 


18.0 


52.2 


• 3 


8.9 


6.0 


3.7 


1955 


: 8.0 


18.1 


58.9 


.2 


6.7 


4.6 


3.5 



T7 Size based on 1955 production 



- 57 - 



CONTAINER SIZES USED TO 
PACKAGE MELLORINE 

Percentage Distribution, 1951-55 




1951 1952 1953 1954 1955 



Half gallons 
Novelties 



I Pints ggg] Quarts 
[X'H Larger than gallons 



23 Gallons 
*3 Cups 



U. S. DEPARTMENT OF AGRICULTURE 



NEC 4256-57(5) AGRICULTURAL MARKETING SERVICE 



Figure 5 



- 58 - 

instance, "both South Carolina and Alabama forbid the sale of mellorine in con- 
tainers of any size except pints, quarts and half gallons. In California, 
there is a law prohibiting the sale of mellorine in bulk for resale. 

The evolution of container sizes already shown for all plants and for 
plants by volume of production is evident in the figures for the States (table 
37). The growth of popularity of the half gallon is particularly noticeable. 
There also appears to be a trend away from the pint carton. The State table 
also brings out that most of the bulk size containers are used in Oklahoma, in 
Texas, and in some of the States of the "other States" category. 



Promotion and Advertising 

The promotion of any new product, whether by advertising or other methods, 
is an important factor in the acceptance or rejection of the product by the 
consuming public. 

About k2. percent of the mellorine manufacturers who responded to the 
questionnaire indicated that they had done some advertising and promotional 
work in the mellorine part of their business (table 38). 

According to plant size, the largest producing group (production in ex- 
cess of 800,000 gallons) was the group that advertised or promoted its product 
most frequently. Sixty-eight percent of the plants in this category indicated 
that they advertised or promoted mellorine. Half of the plants in the small- 
est producing group promoted their product, and in the 2 50,000 -5 00, 000 -gallon 
category, 25 percent used advertising or promotional devices. Thirty-one per- 
cent of the plants in the 500,000-800, 000-gallon class promoted their product. 

On a State basis, Missouri reported that 5^ percent of the mellorine man- 
ufacturers promoted or advertised their product (table 39 )• In Texas, k^ per- 
cent promoted mellorine, and in Illinois, kl percent. Oklahoma manufacturers 
stated that 23 percent advertised, while in the "other States" grouping, the 
percentage was k^ . 

Of the promotional devices used by mellorine producers, demonstrations 
appear to be the most common (table kO) . In 1953; 195^; and 1955:. demonstra- 
tions were the favored promotional device. The promotional devices most used 
in 1955 were free samples, tie-in sales, premiums, special containers, and 
novelty stunts. Some plants listed special promotional devices such as 
streamers, coupons, and special weekend sales as alternate promotional activ- 
ities. 

The smallest and the largest plants did the most promotion in the industry. 
So far as the choice of promotional devices by plant size is concerned, there 
appeared no basic difference between the groups, or any great variation from 
the overall pattern. 



59 



Table 37. — Percentage distribution of container sizes used to package mellorine 
manufactured by responding plants, by States, 1951-19$$ 



State of 
location 
and year 



Pints 



Quarts 



Half- 
gallons 



: Larger : 
Gallons: than : Novelties 
: gallons : 



Cups 



:Percent Percent Percent Percent Percent Percent Percent 



Illinois: 

1951 

1952 

1953 

1954 ..o 

1955 

Missouri: : 

1951 : — 

1952 : 21*. 2 

1953 : 19.5 

195^ : 15.6 

1955 : 7.2 

Oklahoma : : 

1951 : 2.1 

1952 : 26.2 

1953 : 6.3 

195^ : 2.5 

1955 : 3.1 

Texas : : 

1951 : 2.1 

1952 : 26.2 

1953 : 6.3 

195^ : 2.5 

1955 : 3.1 

Other States l/: : 

1953 ..: U..k 

195^ : 15.1 

1955 : 20.9 



hi.l 


16.6 




4o.6 


31.0 


13.2 


30.1 


32.1 


18.0 


25.0 


32.9 


26.1 


16.6 


31.6 


37-2 



100.0 

59.8 
53.5 
kk.6 

35.2 



8.1 

12.6 

7.8. 

3.7 



8.1 

12.6 

7.8 

3.7 



5.7 
2.3 
1.9 



15.6 
25.8 
36.4 
56.9 



56.3 

214-.3 

53.^ 

70.6 

78.3 



56.3 

24. 3 
53-3 
70.5 
78.3 



73-0 

80.5 
7^.9 



10.7 
5.9 
2.7 
2.0 



10.7 
5-9 
2.7 
2.0 



1.4 
1.3 



.1 



6.2 

7.2 
5.3 
4.2 



6.2 

7.2 
5.3 
4.2 



9.8 
2.1 
2.3 



hi.l 




13-5 


0.3 


13.6 


4.9 


10.8 


5.2 


9-4 


5.2 



.3 

1.2 

3.1 
.2 



31.5 

23.1 

11.4 

8.8 

6.7 



31.5 

23.1 

11.4 

8.8 

6.7 



.3 
.4 



3.9 
2.9 
3.2 
2.3 
2.0 



3.9 
2.9 
3.3 
2.4 
2.0 



1/ Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. No data on packaging in this group of States available prior to 
1953. Also see footnote l/, table 5. 



- 6o - 

Table 38. — Responding plants, by size, who have done advertising and 
promotional work on mellorine 

Plant size 1/ Yes No 

Under 250 ,000 gallons : 20 20 

250,000-500,000 gallons : k 12 

500,000-800,000 gallons : k 9 

More than 800,000 gallons : 13 6 

Size unknown : 3 13 

Total : hk 60 

I7 Size based on 1955 production. 

Table 39. — Number of responding plants that have done advertising and 
promotional work on mellorine, by States 

State ; Yes No 

Illinois : 12 17 

Missouri „...: 6 5 

Oklahoma : 3 10 

Texas : Ik 17 

Other States 1/ : 9 11 

Total : kk 60 

17 Includes Alabama, Arkansas, California, Montana, Oregon, and South 
Carolina. See footnote l/, table 5« 

On a State basis, manufacturers in Illinois used demonstrations most fre- 
quently, with free samples next in importance (table kl). In Missouri, the 
stress has been placed on premiums ; free samples, demonstrations, and tie-in 
sales were given equal weight. 

Promotional devices were not used extensively in Oklahoma. The first 
choice of producers in this State appeared to be the distribution of free 
samples . 

Texas promotion has been split fairly evenly between demonstrations and 
tie-in sales . Free samples and novelty stunts also have been utilized. In 
the "all other States" category, demonstrations were the most frequent form 
of promotion. Tie-in sales and free samples followed in importance. No wide 
divergencies from the overall mellorine promotion pattern were observed when 
the State data were analyzed separately. 



- 6l 



Table kO. — Number of responding plants using specific devices for mellorine 
promotion, by size, 1952-1955 



Promotional device 



Size of plant 1/ 



Under : 250,000-: 500,000- :More than: 
250,000 : 500,000 : 800,000 : 800,000 
gallons : gallons : gallons : gallons : 



Size 

■■unknown 



; All 
: plants 



1952: 

Tie-in sales , 

Premiums , 

Demonstrations 

Free samples 

Plastic containers 
Novelty stunts 
Other 



1953: 

Tie-in sales , 

Premiums , 

Demonstrations 

Free samples , 

Plastic containers 
Novelty stunts 
Other o . 



195^: 

Tie-in sales 

Premiums , 

Demonstrations 

Free samples 

Plastic containers 
Novelty stunts 
Other , 



1955: 

Tie-in sales >.»..< 

Premiums , 

Demonstrations . . . 

Free samples 

Plastic containers 
Novelty stunts 
Other 



1 
11 



5 

3 

12 

9 



7 
5 
111 
9 
1 
1 



y Size based on 1955 production. 



Table kl.' 



- 62 - 



■Number of responding plants using specific devices for mellorine 
promotion, by States, 1952-1955 



Promotional device 



Illinois ' Missouri ' Oklahoma ' Texas 



Othe] 
States 



1952: : 

Tie-in sales : 1 1 1 

Premiums „ : 1 

Demonstrations : 3 1 1 

Free samples : 3 1 

Plastic containers ..: 1 

Novelty stunts : 

Other : k 2 

1953: : 

Tie-in sales : 1 1 

Premiums : 1 

Demonstrations ; 3 2 1 

Free samples : 3 2 

Plastic containers . . : 

Novelty stunts ; 

Other : 3 2 

195^: : 

Tie-in sales : 1 

Premiums : 1 2 

Demonstrations ; 3 2 

Free samples : k 2 

Plastic containers . . ; 

Novelty stunts ; --- 

Other : 3 2 

1955: ! 

Tie-in sales : 1 

Premiums : 1 3 

Demonstrations : k 2 

Free samples : 3 2 1 

Plastic containers . . : 

Novelty stunts : 

Other : 3 2 

l7 Includes Alabama, Arkansas, California, Montana, Oregon 
Carolina. See footnote l/, table 5. 



and South 



- 63 - 

Point-of-sale advertising used the greatest part of budget expenditures 
for mellorine advertising (table k2). In each of the h years for -which re- 
ports were received (1952-1955), point-of-sale advertising was used most fre- 
quently, although producers are apparently shifting their emphasis in favor of 
newspaper, radio, and other media. 



Table k2. — Number of responding plants showing various percentages of 
mellorine advertising and promotional budget allocated to various 
classes of media, 1952-1955 





Percent 


Newspaper ' 


Radio 


\ Point of sale 


y : 


Other 2/ 


1952: 














to 


25 percent 


5 


3 


6 




5 


25 to 


50 percent 


3 


2 


3 




1 


50 to 


75 percent 


2 





— 







75 to 


100 percent » . . . 


3 





8 







to 


100 percent .... 


13 


5 


17 




6 


1953: 














to 


25 percent 


3 


5 


7 




7 


25 to 


50 percent 


6 


3 


3 




1 


50 to 


75 percent ..... 


3 


— 


2 




1 


75 to 


100 percent .... 


h 


— 


7 




— 


to 


100 percent .... 


16 


8 


19 




9 


195^: 














to 


25 percent 


3 


5 


8 




7 


25 to 


50 percent 


6 


3 


1 




2 


50 to 


75 percent 


: 2 


— 


2 




2 


75 to 


100 percent .... 


5 


— 


8 







to 


100 percent .... 


16 


8 


19 




11 


1955: 














to 


25 percent 


6 


8 


10 




9 


25 to 


50 percent 


6 


k 


1 




k 


50 to 


75 percent 


2 


— 







— 


75 to 


100 percent .... 


5 


— 


9 




2 


to 


100 percent .... 


19 


12 


20 




15 



1/ ""includes window displays, placards, signs, etc. 
2/ Includes television, handbills, billboards, promotional devices, 
other advertising media. 



and 



In 1952, point-of-sale advertising was used by 17 plants, while 13 used 
newspaper advertising and 5 used radio. The remaining 6 plants used "other" 
media which included television, handbills, billboards, and other advertising 
and promotional devices. 



- 64 - 

The year 1953 showed slight relative declines in the use of point-of-sale 
advertising and newspaper advertising. Slight gains were made in the use of 
radio advertising and the "other" class of promotion and advertising. 

The "other" class increased again in 195^? hut the numbers of plants re- 
porting use of each of the other media were unchanged. 

Use of point-of-sale advertising in promoting mellorine in 1955 increased 
less than did use of other media advertising to a point where it was used by- 
only 30 percent of the total who advertised. Radio advertising and the "other" 
category increased most. 

Table 42 shows the percentages of the promotional budget devoted to the 
various types of advertising by responding plants. Plants which used a single 
medium to the extent of 75 percent or more of their promotional expenditures, 
used either newspapers or point-of-sale methods. Radio and "other/' when used,, 
were mostly limited to less than \ of the promotional expenditures. Point-of- 
sale expenditures up to 25 percent of the promotional budget were also common. 

State and plant size data add little to the information on advertising 
and promotion. They do, however, bear out the assertion that promotion is 
greatest in the largest and smallest plants. 

Of the features emphasized in advertising and promoting mellorine, the 
respondents to the questionnaire indicated that price was the one most fre- 
quently stressed (table 43). In 1952, 43 percent of the respondents who ad- 
vertised stated that they promoted their product on a price basis. In 1953; 
the proportion stressing price in their advertising and promotion rose to ^k 
percent of the total respondents, and remained fairly constant through 1955* 

Table 43. — Number of responding plants reporting specific features emphasized 
in mellorine advertising, 1952-1955 

Feature j 1952 \ 1953 j 1954 j 1955 

Price : 19 24 26 27 

Quality : Ik 19 22 21 

Special flavors : 11 12 15 19 

Taste appeal : 12 13 13 13 

Other 1/ : 6 7 5 5 

XT Includes nutritive value, comparisons to ice cream, etc. 

The feature second in rank was the quality of the product. In 1952, 32 
percent of the respondents stressed quality. In 1953 , the percentage rose to 
43, hit a high of 50 in 1954, and returned to 48 in 1955. 



- 65 - 

Taste appeal accounted for 27 percent of the responses in 1952 . In the 
following three years , it stabilized at 30 percent. Special flavors stood at 
25 percent in 1952 and rose in use in each of the succeeding years. In 1955 
it was used by 4 3 percent of the advertisers. 

The individual features stressed during these years indicate some change 
in trends. Price remained almost constant from 1953 through 1955, but, in the 
other features, some of the shifts may be significant,, The common practice of 
introducing a product with samples — that is, with taste appeal — has declined 
I slightly in importance from the peak year of 1952 when many new firms entered 
the industry. On the other hand, special flavors and quality have increased 
in importance. This seems to indicate that mellorine is becoming a familiar 
i product in most of the areas where it is sold, and that more stress, there- 
ifore, is being placed on the standard frozen dessert features of quality and 
i special flavors. Examination of the data by States and by plant size showed 
no significant deviations from the overall pattern. 

A study of the gross receipts spent on mellorine advertising and promotion 
indicates that the responding plants did little promotion before 1952. In that 
I year, 36 percent of the respondents said they spent less than 2 percent of 
I their gross receipts from mellorine on promotion of the product (table kk) . 
' Forty- three percent spent between 2 and k percent, and 21 percent of them 
spent between k and 6 percent. 

Table kk. — Number of responding plants reporting various percentages of gross 
receipts from mellorine expended on advertising and promoting the product, 
1952-1955 

Expenditure percent ] 1952 [ 1953 .' 1954 \ 1955 

Under 2 percent . » : 5 6 9 9 

2-k percent a . . : 6 8 7 7 

k-6 percent : 3 2 2 k 

6-8 percent <, . : 

More than 8 percent : 1 2 



Thirty- five percent of the respondents said they spent less than 2 per- 
cent of their gross receipts on mellorine promotion in 1953 • An additional k"J 
percent spent between 2 and k percent of their gross receipts, and 12 percent 
spent between k and 6 percent. Six percent of the plants that answered the 
question reported they spent more than 8 percent of their gross mellorine re- 
ceipts on promotion of the product. 



In 1954, ^5 percent of the respondents spent less than 2 percent of their 
gross mellorine receipts for promotion and advertising . Thirty- five percent 



- 66 - 

expended between 2 and k percent, 10 percent between h and 6 percent, and 
another 10 percent spent over 8 percent. 

The 1955 data indicate the breakdown was the same as for 195^, with these 
exceptions: 20 percent of the respondents who answered said they spent be- 
tween h and 6 percent of their gross receipts from mellorine on mellorine pro- 
motion, and no respondents spent over 8 percent. 

There appears to be no trend or pattern developing in the amount of gross 
receipts spent for promotion of mellorine. 



Gross Margins 

The questionnaire did not ask respondents to report their prices for 
mellorine. It was felt that differences in the quality of the product, fat 
content, and differences in local markets would prohibit either addition for 
summary purposes or distribution for comparison by plant size or by States. 
However, respondents were asked to compare their own gross margins on mello- 
rine with their margins on ice cream and also to report the comparison for 
their retailers. 

Of those responding to the question, 48 percent said margins on mellorine 
and ice cream were the same. Forty-one percent said they realized less margin 
on mellorine, while the rest, 11 percent, reported a larger margin on mello- 
rine (table 45, fig. 6). 

These answers seem to be consistent with the reported reasons for enter- 
ing the industry. Two-thirds of the respondents said they began making mello- 
rine to meet competition, while 2k percent said they entered the industry to 
extend their market. Since labor, overhead, and the cost of materials other 
than fat are approximately the same for mellorine and ice cream, one would 
expect relative margins to be the same or lower to reach the stated objec- 
tives. Some producers make mellorine probably to utilize plant capacity and 
increase their total sales. They would likely accept a lower margin on mello- 
rine. Others would produce mellorine because their competitors do. They 
would see the sale of mellorine maintaining their total volume of sales and, 
accordingly, set a margin equal to or nearly equal to that earned on ice cream 

Retailers of mellorine evidently have margins , in relation to ice cream, 
similar to those of manufacturers. Fifty-one percent of the respondents said 
the margin of their retailers was the same on ice cream and mellorine; 47 per- 
cent said the margin on mellorine was the lower of the two. Only 2 percent 
reported a higher margin for mellorine. The differences between producers and 
retailers in this respect do not appear significant. 

Some differences appear among producers when the data are arranged by 
plant size. Fifty- six percent of the respondents in class I reported the 
margin on mellorine and ice cream to be the same; 31 percent said the margin 
on mellorine was lower, while 13 percent said it was higher. 



67 



Table 1+5. ■ 



■Gross margin policy for mellorine compared to ice cream in 
responding plants, by size of plant 



Size of plant 1/ 



Gross margin 



Under : 250,000-: 500,000- :More than: 
250,000 : 500,000 : 800,000 : 800,000 
gallons : gallons : gallons : gallons 



Size | ( 

' unknown ' 



'otal 



Charged by responding : 

plants : : 

Less than that for : 

ice cream : 12 

Equal to that for : 

ice cream : 22 

More than that for : 

ice cream . . . . o : 5 

No answer : 1 

Total : 55" 



lb 



Charged by retailers of : 

responding plants : : 

Less than that for : 

ice cream : 15 

Equal to that for : 

ice cream : 20 

More than that for : 

ice cream : 2 

No answer : 3 

Total : kO ~ 

Y/ Size based on 1955 production. 



10 



~nr 



13 



13 



19 



19 



3 


39 


6 


k6 


2 

k 


10 
9 



T5 IbT 



5 


10 


k 


kk 


8 


7 


6 


hi 


— 


2 


6 


2 

11 



T6' 



104 



Plants in the larger size groups were more inclined to have a lower margin 
on mellorine. In general, half or more of the plants in each group had lower 
margins on mellorine. The number of plants in each of the larger size groups 
was small, therefore the differences among them are not significant. 

The distribution by States follows the pattern to be expected from the 
distribution by size of plant. The States with the largest volume of produc- 
tion, such as Texas and Oklahoma, show the lowest margins in relation to ice 
cream. Illinois is an exception (table 46). One questionnaire suggested an 
explanation for this condition. The respondent stated that a price war in the 
Chicago area had reduced the price of ice cream. This perhaps produced a 
larger than normal percentage of producers reporting the margin on the two 
products to be the same. 



Retailers for 51 percent of responding producers were reported as pricing 
mellorine to earn a gross margin equal to that of ice cream. Forty- seven per- 
cent showed a lower margin on mellorine, while only 2 percent had a higher 
margin on the new product. 



- 68 



GROSS PROFIT MARGINS FOR MELLORINE 
COMPARED WITH ICE CREAM 



PERCENT 



50 



40 



30 



20 - 



10 




Less than 
Equal to 
More than 




1 — 



MANUFACTURERS 



RETAILERS 



U. S. DEPARTMENT OF AGRICULTURE 



■IEG. 4257-57(5) AGRICULTURAL MARKETING SERVICE 



Figure 6 



- 6 9 



Table 46. --Gross margin policy for mellorine, compared to ice cream ; 
responding plants, "by States 



Gross margin 



"Illinois 'Missouri 'Oklahoma" Texas 



: Other ; 
: States l/; 



Total 



Charged by responding : 

plants : : 

Less than that for : 

ice cream : 6 

Equal to that for : 

ice cream . . „ : l6 

More than that for : 

ice cream : 5 

No answer : 

Total : 29 



15 


8 


39 


11 


9 


46 


1 


2 


10 


k 


1 


9 



11 



13 



31 



20 



Charged by retailers of : 
responding plants: 
Less than that for : 

ice cream : 7 1 12 17 7 

Equal to that for : 

ice cream : 21 8 8 10 

More than that for : 

ice cream : 1 1 

No answer : 1 2 1 5 2 

Total : 29 11 13 31 20 

l7 Includes Alabama, Arkansas, California, Montana, Oregon, and South 

Carolina. See footnote l/, table 5« 



104 



44 

hi 

2 
.11 



104 



The State data show that in Illinois no retailer of responding plants 
priced the product to show a gross margin for mellorine greater than the margin 
on ice cream. Seventy- five percent of the plants had retailers receiving equal 
margins on the two products, and 25 percent receiving a lower margin on mello- 
rine than on ice cream. 

In Missouri, 90 percent of the responding plants reported retailers oper- 
ated on the same margin for mellorine and ice cream, while 10 percent said 
their retailers received a lower margin on mellorine than on ice cream. There 
were no instances cited where ice cream margins were less than mellorine mar- 
gins. 

Returns from Oklahoma indicated that all of the retailers received a 
lower margin for mellorine than for ice cream. 

In Texas, retailers for 65 percent of the plants priced their mellorine 
to show less margin than their ice cream. Thirty-one percent showed retailers 
making the same margin, and 4 percent priced mellorine to show a larger margin 
than ice cream. 



- to - 

In the "other States" category , most of the retailers (56 percent of 
plants) realized the same margin on mellorine and ice cream. Thirty- nine per- 
cent made less margin on their mellorine, and 5 percent made more on mellorine 
than on ice cream. 

In three of the five State categories, Illinois, Missouri, and "all other," 
more retailers apparently priced mellorine to make the margin the same as the 
margin on ice cream (table k-'j). Texas and Oklahoma were exceptions. No infor- 
mation helping to explain this condition was obtained from the questionnaire. 
Local market conditions, such as a price war in mellorine or between mellorine 
and ice cream, possibly had effects on the pattern. 



Table k'J , 



-Mellorine and ice cream gross margins for producers and retailers 
compared by States 





Percent of 


Px-oducers 


Perc 


snt of 


retailers 


State 


Margins the : 

same as for : 

ice cream : 


Margins lower 

than for 

ice cream 


Margins the : 

same as for : 

ice cream : 


Margins lower 

than for 

ice cream 




59 
56 
38 
ko 

^7 




22 
22 
62 
56 

k2 


75 

90 



31 
56 




25 




10 




100 




65 


All other 
States 1/ 


39 



1/ Includes Alabama, Arkansas, California, 
Carolina. See footnote l/, table 5- 

Implications 



Montana, Oregon, and South 



Several times in this report — in the discussion of production based on 
both data from the questionnaire and data from the United States Department of 
Agriculture — the inference has been drawn that mellorine production in the 
States where this product is sold has increased through the years but at a de- 
creasing rate. The data on marketing substantiate this inference. 

The meaning of this change in the rate of increase in production and sale 
of mellorine is not entirely clear from the information available. 

The trend in the relation between sales of ice cream and sales of other 
frozen desserts in these 12 States is not clearly evident from responses to 
the questionnaire. In most years for which responses were received, more of 
the producers of mellorine reported an annual increase in their sales of mello- 
rine, ice milk, and sherbet than reported increased sales of ice cream. Never- 
theless, ice cream remained the principal choice of consumers in the States 
where mellorine was sold during the years I952-I95U (table KQ) . However, there 
is some evidence, particularly in Texas, Oklahoma, and Illinois, that the per 



71 



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- 72 - 

capita consumption of ice cream is diminishing while the per capita consump- 
tion of other frozen desserts is increasing. 

The validity of this evidence is strengthened when the rate of production 
of ice cream is compared to the rate of production for all frozen desserts for 
the country as a whole (fig. 7)» In "the 1920' s and early 1930' s, ice cream 
was almost the only frozen dessert. Then, in 1932, new products began to 
appear. From that depression year, production of frozen desserts other than 
ice cream began to increase. This increase was rapid during World War II, 
when butt erf at for ice cream was short in supply and when the effective demand 
for frozen desserts increased. The gap between production of ice cream and of 
all frozen desserts was narrowed in 19^5 a nd 19^, when rationing and price 
control were removed. It has been increasing since 19^-7 > particularly after 
1950 when mellorine gained legalization in more States. 

A number of explanations for these trends suggest themselves. The per 
capita cpnsumption of all frozen desserts has been increasing, indicating a 
strong effective demand for such products. There has been a more rapid in- 
crease in sales of low- fat products; mellorine producers reporting annual in- 
creases in their sales of sherbet and ice milk. Finally, the current contro- 
versy over the health significance of fat in the diet may be influencing 
consumer preferences £/• 

The fact that ice cream began to lose some of its prominence in the field 
during the depression years indicates that producers were attempting to extend 
their markets by offering consumers a low-priced product. That this factor is 
now at work in the markets where mellorine is sold is indicated by the fact 
that 2k percent of the respondents said they entered the mellorine industry 
specifically for this purpose and that 66 percent said they entered the indus- 
try to meet competition, which is, in another sense, an attempt to extend 
markets. The evidence that price is a factor in the growth of production and 
sale of mellorine is strengthened by the fact that producers stressed the 
relatively low cost of their product in their advertising. 



CONCLUSIONS 

Resources for the production of mellorine have been available to producers 
for years in the form of vegetable oils and animal fats. Capital also has been 
available, without additional investment in most cases, because the product can 
be made with the same equipment used for making ice cream. Knowledge of how to 
use fats other than milk fats in frozen desserts existed during the late 19^0' s. 
borrowed from the past and from abroad. Some stimulus was needed to impel pro- 
ducers to organize this knowledge and extend it to the point where a new prod- 
uct, mellorine, might emerge to be sold widely in the United States. 

97 Grant, H. B. , "An Editorial," Ice Cream Field , Vol. 59, No. 6, June 
1952, p. 21. 



- 73 

















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- 7k - 

The stimulus came in the 19^0 ' s when, apparently, the effective demand 
for ice cream was rising rapidly, milk fat supplies were low relative to de- 
mand, and a shift occurred toward acceptance of substitute products. Produc- 
ers did not immediately offer the fully developed product, mellorine. Rather, 
evidence shows they mixed vegetable oils with butterfat, probably in attempts 
to reduce their supply prices, to augment low supplies of butterfat, to experi- 
ment with consumers' tastes and preferences, and to confirm their new knowledge 
about the use of new resources with existing technical equipment. 

This "mixing" stage soon disappeared and a new product, mellorine, emerg- 
ed when tentative knowledge was confirmed and it was learned that consumers 
would accept the product. 

A pattern by which producers, particularly in Texas, Oklahoma, Illinois, 
and Missouri, entered the new industry soon emerged: 

1. The small plants (classes I and II) entered the industry 
generally before the larger plants (classes III and IV). 

2. Most of the plants in the States with the greatest volume 
in 1955 delayed entry until there was some evidence that 
the product could be made successfully and that there was 
an effective demand. 

Entry of the innovators and early imitators created a new condition in 
the local markets for ice cream and other frozen desserts. Most producers of 
frozen desserts were interested in conserving the market for ice cream and its 
institutional arrangements- -that is, the kinds of firms in it, and the laws 
and regulations affecting it. Those who introduced mellorine were concerned 
with changing those institutional arrangements, if necessary, so they could 
sell their product. State governments and administrative agencies accepted 
their responsibility for protecting consumers and producers by establishing 
standards of identity and by reconciling differences between conflicting in- 
terests. 

The third phase in the development of mellorine, when laws and regulations 
were established and changed, broadened greatly in 1953; when six States fol- 
lowed the lead of Texas and California. Two observations can be made in con- 
nection with this development : 

3. The vast majority of producers in the primary producing States 
did not wait for specific enabling legislation before entering 
the industry. 

k. The legislation in 1953 apparently did not result in any great 
increase in the number of producers. It was accompanied by the 
entry of a few producers in a larger number of States <, 

Two main reasons for entering the industry were ascertained from the 
questionnaire. These answers indicate that producers felt that there was an 



- 75 - 

effective demand for mellorine, which threatened to reduce the volume of their 
ice cream and other frozen dessert products unless they entered the industry. 
The answers show: 

5. The principal reasons for entry into the industry were: (l) To 
meet competition of other producers and (2) to extend the volume 
of a producer's sales. 

The existence of this demand was apparently associated with two important 
market changes: 

6. While ice cream remains the principal frozen dessert, an increas- 
ing number of consumers in these 12 States are accepting a frozen 
dessert made from vegetable oils, animal fats, or both. 

7. The lower price of mellorine in relation to ice cream was in- 
creasingly attractive to consumers in these States. This 
situation was apparently recognized by producers who, after an 
introduction period when they attempted to induce consumers to 
taste their product, stressed the price of mellorine in their 
advertising more than any other single feature. 

Relatively few plants have discontinued the production of mellorine. No 
single difficulty or insolvable problem seems to account for discontinuances. 
A study of the reasons reported on the questionnaire provides only one general- 
ization: 

8. Few, if any, producers encountered production problems unique to 
mellorine. Those that discontinued production of the product 
were generally small plants that were probably encountering pro- 
duction problems associated generally with the frozen dessert 
industry. 

Some time could be expected to elapse, after the introduction of a new 
product and its acceptance by consumers, before a pattern of production would 
emerge. This was the case with mellorine. Although definitive conclusions 
cannot be drawn from data for such a short period of time, there is evidence 
of a production pattern taking shape : 

9. The small plants (classes I and II ) in recent years apparently 
have been producing a smaller percentage of the total mellorine 
production than formerly. These data suggest, although they do 
not prove, the possibility of concentration in the industry. 

10. An increasing number of plants in all size categories are pro- 
ducing mellorine mix for sale to others. There is some evidence 
of a growing "specialization in this aspect of the industry, par- 
ticularly in Texas, Illinois, and Oklahoma. 



- T 6 - 

Producers would "be expected to encounter production problems associated 
with a new product. This was the case with mellorine. Except in a few in- 
stances , and those generally in the small plants, these problems were not of 
sufficient difficulty to induce producers to discontinue operations. Some of 
these problems, such as shrinkage and obtaining the desired overrun, are : 
common to all frozen desserts. Another, fat globules adhering to the walls of 
the mixing vats, has proved difficult to overcome. The literature indicates, 
however, that some progress is being made. Small plants (class I) seem to 
have some difficulty in obtaining a satisfactory flavor. However, this did 
not seem to be an important problem in larger plants. Generalization about 
production problems is difficult. However, the following, only tentative, 
seems to be the case : 

11. The small plants (class I) were the only group to report a 
major production problem. This was difficulty with flavoring. 

12. Approximately two-thirds of the small plants reporting said 
they had a production problem, such as difficulty with flavor- 
ing, shrinkage, difficulty in stabilizing and emulsifying, and 
nonuniformity of the fat. 

13. More than three-fourths of the large plants (class IV) reported 
production problems of some kind. However, no single problem 
was of special prominence as was the case with the small pro- 
ducers. 

14. A smaller percentage of the class II and class III plants reported 
production problems. As in the case of class IV plants, no 
single problem was of major importance in these two categories. 

A review of the State laws would lead one to expect a large proportion of 
producers to report that their product was fortified with vitamins. The sur- 
vey did not reveal this to be the case. What is more, this observation did 
not change when the data were distributed by plant size or by States. No ex- 
planation for this situation is available. 

An analysis of marketing practices reported by producers of mellorine 
reveals some interesting results, some expected and some unique within the in- 
dustry. A substantial percentage of respondents reported annual increases in 
their sales for the years 19^9 to 1955- Of particular significance was the 
fact that these reports suggest: 

15. The future of mellorine production in the 12 States where the 
product is made, as reflected by the percentage of producers 
reporting an annual increase in sales, appeared most promising 
in the years 1951 and 1952, when the largest number of producers 
entered the industry. 



- 77 - 

16. Local variations in the production of ice cream, ice milk, and 
sherbet by producers of mellorine apparently follow closely 
the national trends in production of these products. 

Apparently a pattern has been established in these States for distribut- 
ing mellorine, and apparently the pattern does not vary significantly among 
the States with the larger volumes of sales. Bulk sales through confection- 
eries and drugstores have declined to a minor part of total sales. Most of 
the sales by producers are to supermarkets and other grocery stores. The type 
of outlet, or choice between the two, evidently depends a great deal on plant 
size. 

17. The small plants (class I) are tending to distribute more and 
more through grocery stores other than supermarkets while the 
larger plants (classes II, III, and IV) are tending to distrib- 
ute most of their product through supermarkets. 

18. Most of the unfrozen mellorine mix sold, approximately 85 per- 
cent, is distributed through drive-in stands. 

The pattern of distribution has had some effect upon package size. In 
the States where sold, mellorine increasingly is becoming a product for home 
consumption and for consumption at drive-in stands. 

19. Most of the mellorine sold by producers in recent years (almost 
60 percent in 1955) is sold in half-gallon packages. This 
pattern of distribution applies to all the States where the 
product is sold in significant volume. Only in Illinois, where 
quart packages approached the volume of half-gallon size (31 
percent as compared to 37 percent), was there any significant 
deviation from the pattern. 

Respondents did not report extensive or vigorous advertising of mellorine 
generally. More than half said they did no promotion or advertising; no sig- 
nificant differences appeared when these responses were distributed Hj plant 
size or by States. Only in Missouri, where the number (ll) of respondents was 
relatively small, did advertising and promotion seem significant to producers 
generally. The answers from this State were almost evenly divided between 
those who did and those who did not advertise. There is some evidence that a 
few independent, very profitable producers specializing in the distribution of 
mellorine and a few large companies producing the product successfully have 
had vigorous advertising and promotional campaigns 10/. Then, too, the ques- 
tionnaire was not designed to reveal the part played, if any, by institutional 
advertising or by the advertising of a brand name. These conclusions may be 
reached: 



10/ Ice Cream Field, Vol. 59, No. 6, June 1952, pp. 20, 28, 



- 78 - 

20. Demonstrations at the point of sale have "become increasingly 
important as a means of promoting mellorine when promotion is 
used. 

21. Newspapers have "been and are an important medium for advertis- 
ing the product. 

22. Price, quality, and special flavors are the principal features 
emphasized in advertising mellorine. 

23. When advertising is used, the amount expended is usually less 
than k percent of the company's gross receipts from mellorine. 

Most producers entered the industry to meet competition or to extend the 
volume of their sales. It might be expected, therefore, that the profit mar- 
gins on mellorine -would be the same or less than the profit margins on ice 
cream and other frozen desserts. That was the case generally. However, the 
data raise some questions : Are those reporting higher margins for mellorine 
what might be called marginal operators trying to recover some of the profit 
not forthcoming from ice cream? To what extent are those with lower margins 
specializing in the production of mellorine ? 11/ These and other important 
questions need answering before the full significance of the data associated 
with profit margins can be uncovered. The following conclusion may be reached: 

2k, Profit margins for producers and for those retailing the product 
of the responding producers tended to be the same or lower than 
profit margins on ice cream. Distribution by plant size or 
location produced no significant differences in these findings. 

Ice cream remains the principal frozen dessert for the country as a whole 
and in those States where mellorine is produced. There is some evidence, how- 
ever, that the per capita production of ice cream is di minishing in these 
latter States and that the per capita production of frozen desserts other than 
ice cream is increasing. This evidence can be extended to the country as a 
whole when the annual rate of production for ice cream is compared to the 
annual rate of production for all frozen desserts. 

25. The effective demand for frozen desserts as a whole has remained 
strong in recent years. 

26. There have been relatively large increases in the low- fat frozen 
products as compared with ice cream. 



11/ Myrick, N. , "Vegetable Fat Challenges Ice Cream." American Milk 
Review , Vol. Ik, No. 12, December 1952, p. lk. 



- 79 - 

27. There is also some evidence that producers have maintained or 
extended their markets for frozen desserts by offering increas- 
ing amounts of low-priced products, particularly mellorine. 

28. The production of mellorine has been increasing at a decreasing 
rate. This suggests that the markets where mellorine is produced 
and sold are approaching a limit. 

As an industry, the production and distribution of mellorine remains 
localized, largely limited to Texas, Oklahoma, Missouri, and Illinois and to 
local areas in the other States where the product is legal. The evidence in- 
dicates that markets for the product in these States have been growing, but 
recently at a decreasing rate. 

Apparently some of this expansion in market has been in competition with 
ice cream. The evidence is, however, that much of the demand is not for a 
substitute for ice cream. The low price of mellorine in relation to ice cream 
offers a frozen dessert to some consumers in these 12 States who, because 
their income is low, would not be in the market for ice cream at the present 
level of prices. The fact that ice cream production in these 12 States has 
not kept pace with the growth in the frozen dessert industry as a whole in 
these States is partly a matter of changing consumer tastes and preferences „ 
Even a lower price for a food might not attract persons consciously restrict- 
ing their intake of that food as a means of reducing their calorie and fat 
consumption. 

Since the production and distribution of mellorine is localized, further 
understanding of the industry's structure and operations must await more de- 
tailed study of particular markets. Only when these studies have been made 
will it be possible to describe more concretely and precisely the character 
and prospects of the industry. Only when local markets have been studied in 
more detail will it be possible to draw further inferences about the impact 
of mellorine on the related agricultural industries. 



«U. S. GOVERNMENT PRINTING OFFICE: 1958 O -454475